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What Is the Proactive Approach in Finance?
Proactive banking refers to an approach in which you anticipate customer needs and offer solutions beforehand. It is contrary to the traditional way banks operate—reactive banking.
Traditionally, banks offered their customers call centers with agents ready to solve their problems. However, in the proactive approach, this isn’t your goal—you want to predict what may happen and reach out to your clients first.
Why Should You Adopt the Proactive Approach in Banking?
You might be wondering: do we really need to adopt a proactive approach if traditional banks are reactive? Yes, you have! First of all, due to FinTechs, the competition in finance is much more fierce right now, so it is an excellent way to stand out from the crowd. But most importantly, it is what modern clients expect from their banks.
Additionally, proactive banking has multiple benefits, some of which are listed below.
Improved Customer Engagement
Like the optichannel approach, the proactive approach boosts customer engagement in banking. Since you’re the one to reach out first, you automatically remind your clients about your existence and encourage them to interact with your bank more frequently. As a result, this leads to higher customer loyalty, which is crucial in the era of dreadfully high customer acquisition costs.
Lower Escalation Risks
Many problems start small but grow big if they are not tackled early on. With proactive banking, this is no longer a problem—you eliminate each customer issue from the root, ensuring nothing will grow out of your control. This means that many problems will be solved much faster, resulting in a better customer experience.
Lower Operating Costs
Yes, in the long run, proactive banking generates lower operating costs. This is closely related to the previous benefit. Since you can eliminate issues at their roots, you won’t need as much labor as in the case of more severe problems. Plus, this way, you don’t need that big of a customer service team, as fewer customers are likely to contact you.
How to Adopt the Proactive Banking Approach?
Do you want your bank to become proactive? In this case, you need to undertake several steps. Take a look at them below.
Collect, Cleanse, and Analyze Your Data
Data is the basis for proactivity. Only through it can you predict what products or content your client will become interested in, understand what problems they might face, or even discover that they are leaning towards churning. Therefore, the first step to becoming a proactive bank is to collect and prepare your data for analysis.
The best way to do that is with the help of AI, as it is excellent at data processing—truth be said, you won’t be able to analyze your vast amounts of data for every client without the help of artificial intelligence. However, even AI needs to learn from something—you need to prepare your historical data first and feed it to the engine. Moreover, this also requires you to integrate all your data sources. How to do that?
The simplest and best way is to invest in a customer data platform for banking, such as LiveBank. This way, you will gain everything you need, compressed into a single solution:
- automated data integration,
- powerful AI to analyze your data,
- automated data collection.
Integrate Your Internal Processes
Data is worthless without humans—you still need team members who can generate relevant solutions. Although our platform can provide your clients with tailored product recommendations, the aid of human employees is irreplaceable. But can they be truly proactive?
If different teams work from various locations but need to collaborate to solve certain problems, you need to streamline their communication. Otherwise, your organization won’t be able to become proactive—locating issues and points to act on is only the first step; you need to be ready to provide solutions quickly to achieve success.
The Takeaway
Proactive banking is an approach in which you anticipate client needs and act on them in advance. It is an effective way to improve customer experience, satisfaction, and loyalty. Therefore, you should adopt proactive banking in your organization, as this is the key to becoming a truly customer-centric bank!
You might also read: How to Leverage Customer Feedback for Continuous Improvement in Digital Banking
