Business Models
Banking on Customer Centricity:
Driving Growth in the Caribbean
Region
Brenda Pope, MBA, BSC, CISA, CMC
As banks across the Caribbean start to face the spectre of the potential loss of correspondent status,
many are now looking to inspire the next round of growth in their home markets. This will require
indigenous banks to become more customer centric, says the author, “not only in their ‘front-end’
service offerings, but right across the enterprise.” She says: “The big question now is whether Caribbean banks can reinvent their current ‘brownfield’ operations or whether they should start anew.”
A
round the world, banking executives are starting to
renew their focus on their customers. Caribbean
banks would be smart to take note. Indeed, customer
centricity is likely to be the key to sustainability in the Caribbean
region and absolutely critical to growth.
In part, this is because most indigenous banks now face the real
risk of losing their correspondent bank status. This will have a
direct and dramatic impact on their commercial business and –
left unchecked – may lead to a loss of customers, both business
and retail. New avenues of growth will need to be found and
tapped.
At the same time, banks are starting to feel the competitive
pressure from Financial Technology (FinTech) startups, albeit at
a much slower pace than their competitors in Europe, Asia and
North America. But the reality is that these nimble and highly
customer-centric propositions are quickly gaining customer loyalty and slowly starting to erode traditional banks’ hegemony in
many parts of the value chain.
Customer Centricity Done Right: Customer preferences
are also changing and creating new expectations for banks. And
customers are no longer comparing their banking experience
against other banks; today’s consumers compare their experience against all of the other service providers they come into
contact with. Simply put, banks are now being compared to the
likes of Amazon and Facebook when it comes to user experience, and those are large shoes to fill.
Maybe the most urgent driver for customer centricity, however,
comes down to costs and margins. Done right, customer centricity should lead to improved service levels and reduced service costs. It should allow bank representatives (people or bots)
to cross-sell services to profitable customers. And it should drive
customer acquisition, all of which impact costs and margins.
Breaking the Inertia: The problem is that Caribbean banks
– not unlike their traditional peers in other markets – have been
slow to respond. For some, the challenge has been one of inertia; their correspondent status has been the key driver of growth
in the past and some are still coming to terms with the new
reality.
“
I
ndigenous banks now face
the real risk of losing their
correspondent bank status. This
will have a direct and dramatic
impact on their commercial
business
”
The shift to customer centricity in the Caribbean has also been
somewhat slowed by comparatively low levels of financial literacy and internet penetration across the region. This has allowed banks to avoid some of the sharper pressures now being
experienced by banks in other markets where customers are
increasingly pushing for improved digital, mobile and customer
experiences.
Likely the most pervasive reason for this lack of momentum
comes down to the very real day-to-day challenges of ‘keeping
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