In Cross Sell, Customer Acquisition and Retention, Customer Experience

In one of my last posts, I addressed how financial institutions (FIs) can use Zoot’s Enterprise Cross-Sell® solution to tap into customer data and set a customer-centric course for their relationships. I mentioned two concepts in that post:  share of wallet, and share of lifestyle. Let’s take a more in-depth look at the second idea – share of lifestyle.

“One Size Fits All” Does Not Fit in Finance

Customers use FIs for a variety of products and services. From standard checking and savings accounts to unsecured lines of credit, from mortgages and wealth management to student and auto loans; the variety of products and services that an FI can provide are as diverse and nuanced as the 325 million people that call America home.

It makes sense, then, that FIs cannot adopt generic strategies to serve their customers in the best possible way. While broad tactics can help raise awareness, the FIs who take the lion’s share of customers will be those that understand they are working to serve the financial needs of individuals, and tailor their operations, and messages, accordingly.

Each demographic slice of America has a different financial reality, and the individuals within those cohorts have unique needs from their peers. While one 35-year-old urban woman might rely on her bank to manage her checking, savings and mutual fund, another 35-year-old lady in the same town might need to refinance her mortgage, or access cash through a HELOC to help pay for her child’s education. On paper, these women share broad traits like age, location and even income, but their individual financial needs are wildly different.

In a case like this, an FI that has an enterprise-level view of the customer (and her unique facets) is far more likely to be able to understand what products and services are most appealing. And with the ability to present those products and services, in real time, to each specific customer, the FI is going to become the trusted financial partner for that person.

Share of Lifestyle: Become the Bank Your Customers Want

The idea behind expanding your share of lifestyle is similar to the tried and true idea of share of wallet, but has a different emphasis. In the wallet mentality, the FI is putting its own best interests first and working to hold and manage all of someone’s financial assets.

In the lifestyle mentality, the FI takes a different approach. Rather than focusing on capturing access to/management of a customer’s assets, the company focuses on becoming the go-to source for all of the financial needs in a customer’s life.

It’s a subtle difference, but one worth noting; it is a pivot from business centric to consumer centric. Sounds easy! But it is incredibly hard, because it requires a shift in how FIs engage their customers, how they come to know them and how they provide products and services on a case-by-case basis.

The primary piece that any FI needs to become a leader in the “share of lifestyle” approach is data. Data about the customer, about that customer’s financial reality, their plans, desires, dreams and needs. Data about existing accounts or lines of credit for current customers, and traditional bureau as well as emerging/alternative data about prospective customers. Data from a myriad of sources, pulled together in a single platform that spans all lines of business and is immediately accessible and actionable.

That’s where many current and legacy systems fall short. There may be a treasure trove of customer data in the credit card LOB, but unless the DDA line has that information, they will fall short of providing the best experience for that customer.

FIs need the capabilities to access all that data, regardless of source, to inform their discussions with – and decisions about – a customer. From internal LOB data, to external bureau data, to third-party ID verification and validation, any FI that wants to take the lead in share of lifestyle will need a platform capable of harnessing this information and turning it into positive action for consumers.

More Than Products, More Than Services

Becoming a leader in the share of lifestyle approach also means meeting the customer on her terms. Bank branches are a great place to conduct business – if you’re a banker. Consumers, however, don’t want to be forced to bank in a specific location during specific hours. They are increasingly turning away from branches in favor of mobile and online banking, which are convenient and easy for the consumer.

FIs that recognize this shift and embrace the change are taking the first crucial steps towards becoming a lifestyle company. They understand that a consumer lifestyle is no longer tethered to a physical location.

“Have phone, will bank” could be the new mantra for a lifestyle bank. Instead of letting a physical location dictate when and where a consumer can manage their financial life, leading companies are providing the customer the tools like mobile apps and online portals to manage their finances when and where it’s convenient for the individual. This shift in customer engagement, combined with the depth of insight informed with internal and external data, is the holy grail that lifestyle leaders should aim to deliver.

Where can those leading FIs access that wealth of data? With Zoot, it’s through our Enterprise Cross-Sell platform. Contact us today to learn more about transforming your company into a lifestyle leader.

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