The Business Case for Customer Centricity

Why should financial service providers implement a customer-centric initiative?

This Brief argues that generating greater value for customers is good for business. Research from a developed market context has found that customer retention leads to a decrease in operating costs, while a decrease in customer satisfaction leads to a decrease in return on investment. In light of this, focusing on customers is crucial and not simply a marketing gimmick. 

There are several compelling reasons that can motivate financial service providers (FSPs) to implement a customer-centric initiative, or even go further to implement a comprehensive customer-centric strategy. The following five business objectives generally motivate firms to explore and invest in greater customer centricity:

  1. Increase customer uptake and use;
  2. Improve market position in a competitive environment;
  3. Use technology to tailor products to specific customer segments while driving down costs;
  4. Respond to regulatory requirements on consumer protection;
  5. Achieve social impact to fulfill its mission.

The decision-making model in this Brief aims to help firms align their investment decisions with their motivations for customer centricity. 

About this Publication

By Stahl, L. Magnoni, B. , Coetzee, G.