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3 Ways for Financial Institutions to Think Differently About Building Customer Relationships

Banks are in the relationship business. They’re sitting on an ocean of data about the most detailed transactions of their customers’ daily lives. So how can banks get better at knowing their customers and building customer relationships for acquiring more assets? 

It’s time for banks to think differently about how to build customer relationships. Here are three ways to get started.

1. Get smarter and more targeted growth within existing customer relationships.

Relationships are the foundation of all business, and banks need to get better at using their existing customer relationships to grow. Technology can help with this. There are powerful ways to mine your relationship capital to holistically capture internal leads from commercial and personal banking, to help leverage your banking relationships in more targeted, sophisticated ways. 

Financial institutions collect mass amounts of data on their customers. How can you drive this further? Forward-thinking banks are getting more serious about data science, automation, and leveraging technology to capitalize further on their customer relationships. As a commercial banker or wealth manager, it can be hard to build your book of business. Growing from within your foundation of existing relationships can be a powerful strategy for financial institutions.

2. Draw upon internal data about your relationship insights to understand the influence in your top accounts

Some financial institutions are already being proactive in analyzing internal data about customers. Top executives from financial institutions globally are talking more about growing within their customer base and using those existing relationships to create growth for other products. But what about your employees? Someone who works at your bank might already have a great relationship with the CEO of a company who is a top prospect to become a customer for a personal wealth manager. 

Leverage your internal relationship capital across your organization to drive referrals and leads for other business units. Your commercial banking relationships have strong potential to become personal wealth clients, or customers for mortgages, insurance and other products that your institution offers. 

3. Break down silos within the bank and build your relationship graph

Technology and strategy can be part of the solution, but the biggest difference-maker is within the culture of the organization. Financial institutions need to shift their cultures away from silos and toward sharing. Different parts of the firm need to talk with each other and share with each other. Who “owns” a customer relationship? The organization does. The entire organization wins if the different business units can collaborate better. 

CEOs and Heads of lines of business need to develop a top-down strategy to get the entire institution to share information and customer intelligence with each other. This makes it easier for the entire bank to leverage existing relationships across the organization to retain customers and cross-sell.  

When financial institutions have a culture of sharing and leveraging relationships across the entire organization, it creates a virtuous cycle where more capital stays within the firm. By tearing down those silos, you can hold onto your relationship capital and keep that virtuous cycle of money within your institution. Right now, you’re potentially losing out on new revenue streams if you are not leveraging existing relationships across the business units.  

By breaking down silos and improving the sharing of information within the institution, you can:

  • find better opportunities to engage with customers before they leave, 
  • uncover opportunities you might not have known about, and 
  • connect with prospects via warm introductions based on relationships that you already have. 

Relationships are a financial institution’s ultimate currency and competitive advantage. No one knows their customers better than them, and with the right shifts in culture and strategy, your organization can achieve bigger growth by building from within. 

Right now, your financial institution already has a significant supply of relationship capital with massive potential for growth, but for too many organizations, relationship capital is an underutilized asset. Financial institutions need to get more proactive at tapping into that capital so they can capitalize on bigger opportunities. 

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