A well implemented customer-centric strategy should improve a bank’s ability to attract new customers, grow their mutual value, and make it easier to keep valuable customers.

It is achieved by building and implementing profitable propositions that customers want to buy and use and that improves customer satisfaction, trust, and loyalty.

Organise around Customers

Customer-centricity means the bank organises its business around customers, not products or channels.

What a retail bank does for customers

The six principal things that a retail bank does for its customers:

  1. Keep their money and data safe;
  2. Handle payments (incoming and outgoing);
  3. Keep track of what they receive and spend;
  4. Lend money;
  5. Pay interest on savings;
  6. Offer other products, such as insurance.

Traditionally, banks offered a current account with a debit card, a savings account if the customer asked for one, an overdraft if requested, and access to all channels irrespective of the purpose or need the customer had.

Customer Propositions

Customer-centric banks normally offer a range of customer propositions to meet the needs of their customers: these propositions are designed to solve a problem or get a job done.

The following is an example of a customer proposition for students who are about to go to university and will probably live away from home and be budgeting for the first time.

PropositionTypical general featuresProblem solved or job done

Designed for a student at University.

Customer must be over 18 years old.

Bank account with debit card and access to limited credit facilities.

Access to savings and other products such as insurance.

Access to all channels.

Offers up-front or on-going incentives to joining the bank.
Offers budgeting information to help customer better manage their money through secure Internet banking and Mobile banking app.

Provides a wide range of payment options to make regular and one-off payments to settle bills, subscriptions, and shopping.

Helps the customer shop online with confidence through mobile phone app-based authentication using biometrics. Access to help, information and advice through the bank’s channels, some of which are 24/7.

Reduces the amount of cash that they need to carry through a debit card that is accepted worldwide. Interest free overdrafts (subject to credit status) to help manage unexpected expenses.

Offer of discounted insurance for their possessions, such as phone and computer, not covered by parent’s policy, whilst living and studying at college.

Offers of food and goods purchase cash rewards or cash back.
Smarter Way Mentors Limited 2021

The proposition helps solve a common problem that students face when they leave home for university, such as budgeting to make sure they manage their money and can handle unexpected expenses during the term. For instance, a student’s possessions may no longer be covered by their parent’s household insurance.

Finally, because the market for student accounts is highly competitive, this proposition offers discount or cash-back offers with retailers and food delivery services that students use, to reward the student for joining the bank.

We discuss how a retail bank develops customer propositions later in this section.