The Customer's Perspective

November 3, 2017


Banks face several problems in today’s competitive environment including the growth of financial technology (fintech) firms, interest rate pressures that has a downward influence on profit margins, and customer expectations and experiences. How do financial institutions manage these problems?


The growth of tech firms has taken a bite out of the consumer market and crowd funding makes it easy to obtain start-up capital. Typically, this kind of funding is not the primary target for institutional organizations because of the start-up nature of the business. Additionally, the companies do not have the requisite track record to satisfy a risk review. Often these entities are funneled into SBA express loans as a means of satisfying early stage funding. The risk is transferred from the bank to the SBA through these loan instruments. A solution for some institutions has been to increase their infrastructure around SBA lending in order to capture the incomes that is derived therefrom.


Another means of combating earnings pressures is through technology delivery of banking services. This is a continuing trend that offsets human capital requirements and even the need for growth in brick and mortar. With the increasing nature of a new banking clientele identified as the Millennials, requires attention, it is not necessary to make wholesale changes to capture their business. Click through banking is a convenience to all bank customers, not just a specialized group. Convenience is what drives many decisions in how one wants to interact with their institution. Focusing on convenience services is a low cost, high customer satisfaction yield that attracts and retains a customer base.


 The American Banker cautions that while Millennials like technology as a means of accomplishing tasks they do not like electronic marketing. These is evidenced by the results of surveys that indicate 60% of respondents say there is too much mail and of those 39% want a reduction in electronic promotions. The real evidence lies in the fact that only 16% of them open emails and 1.6% is the click-through rate.


Returning to customer satisfaction yield, the question then lies in how to increase that yield. This is where the T to the fifth power program becomes an important adaptation to the customer relationship. Remembering this is a customer-centric program that guarantees an increase in customer retention, loan requests, and deposits. T to the fifth power ensures a high yield customer experience and will drive profitability along with increased competition toward the Fintech companies. Nothing replaces the human touch and while technology advances as a delivery mechanism of convenience it is only an adjunct to an overall relationship centered in human communication. T to the fifth power ensures this takes place at all levels of the relationship. Further, it is the program that aligns the coordinated effort of the support staff with the front line personnel managing the relationships.


For more detailed information on T to the fifth power be sure to call Larry Friis @ 801-885-0748


Larry Friis is the Principal at High-touch Leadership, an advisory services firm for the financial services industry. He has served on the Board of Directors of two financial institutions and is a Professional speaker, a Doctoral Candidate, and an Adjunct Professor. He was a banker for more than 20 years. Larry can be reached at


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