In a world where customers have an ever-widening array of choices, banking and financial services need to enhance the customer experience in order to build loyalty, retain customers, and reduce churn. How? Relationship statements.
Statements represent a unique customer touch point for every organization and provide a tool that can significantly influence customer behavior. But most people don’t necessarily recognize the difference between today’s more-ambitious statements and the traditional customer statement they’re accustomed to receiving. Historically, customer account information was displayed and conveyed simply, often in the least-expensive manner, as a requirement of conducting business. While these documents met the regulatory requirements of particular markets, they failed to capitalize on the possibility of truly effective customer communications.
Traditional statements provide little more than basic client transactional account data and contact information. These documents offer little descriptive information or guidance, forcing readers to interpret data. Moreover, if clients maintain multiple accounts with a single organization, such as a bank or financial services firm, they receive multiple, individual statements—requiring them to construct their own comprehensive views of the multiple accounts. To top it all off, traditional statements lack any visual excitement that might entice a reader to give them more than a cursory glance.
But times have changed. In order to attract and retain high-value clients, companies need to produce statements that are easy to understand, allowing customers to effectively manage their account information. Customers are reporting greater satisfaction with the readability and ease of comprehension of these new communications, and as a result, banks and financial services firms are fielding fewer customer service inquiries. This new breed of customer communication is branded the relationship statement.
A relationship statement consolidates information from multiple accounts into a single comprehensive document, including a summary. With brand loyalty being the corporate version of going steady, a breakup was inevitable given the way customers were treated in the past. However, now armed with new technologies and delivery options, firms are able to make up with unhappy customers and provide communications that increase the value of the relationship, increasing switching costs, and, ultimately, make the relationship more sticky.
What Makes a Good Relationship Statement?
The intention of the relationship statement is simple, treat your best customers better. Firms have long developed metrics and algorithms to determine which customers are the firms’ best, most profitable, and most desirable, but they have been slow in adopting ways to better communicate with this select group. Special 1-800 numbers and express lanes within branches are useful, but only if the customer initiates those communication channels.
A relationship statement is a monthly appointment with a firm’s best clients. When clients are more likely to spend time reading a statement, an organization has an opportunity to deliver higher value, more information, and increase customer loyalty. In addition, the use of dynamic graphical elements and the recent addition of color printing serves to enhance a customer’s comprehension of the information and strengthens brand recognition.
If relationship statements make so much sense, why haven’t we always had them? Well for starters, the technology hasn’t always been available. Data mining, document layout, and statement composition software has matured to the point where creating sophisticated account statements, with information and images triggered based on the data presented for that customer, is now relatively simple.
While composition tool advancements have made construction less challenging, it takes skill and effort to design and lay out a relationship statement. These documents, which include summary pages, account interdependencies, and intricate reporting hierarchies, often have multiple lines of business ownership within an organization, which can make design consensus difficult.
In addition to the design hurdles, data accuracy, sourcing, and management can provide significant obstacles. These challenges are exacerbated when multiple legacy core systems are used to source the required data. Multiple file formats, record key discrepancies, and data mapping layouts all create additional IT integration efforts and opportunities for error.
In addition, pure data quality becomes a more significant factor as information is merged from multiple legacy systems onto a single document, and is repurposed for summaries. A simple data quality error within a single account in the back of the relationship statement could roll up to summary errors on multiple pages, and ultimately on the cover page.
However, the benefits of relationship statements will drive demand, which will drive improvements in the technology used to create and deploy them, eliminating these obstacles. These benefits include the consolidated delivery of relevant information that increases the value of the relationship between firms and clients while reducing delivery costs for organizations, specifically the largest single cost—postage. Advancements in technology also provide targeted marketing and personalized messaging, creating revenue opportunities previously difficult to liberate.
Players
While relatively new, there are good examples of relationship statements already available in the market. Financial services firms have identified the need for such communications, born out of servicing multiple client requirements within the firm. For example, many financial services firms offer a range of brokerage products, ranging from retirement and non-qualified accounts, in addition to stand-alone mutual fund accounts, and, more recently, retail banking services.
These are separate accounts, often on separate legacy accounting systems that generate separate accounting and reporting data that must be reconciled and reported as a cohesive account portfolio. Many of the large firms also offer insurance and other financial products, such as mortgages and home equity loans. With all these accounts converging, it’s easy to see how diverse and varied a relationship statement can become.
During the mid-’90s, Fidelity Investments redesigned one of the first consolidated relationship statements for its retail—non-institutional—customers. The redesigned, landscape brokerage statement was deployed and consolidated as many as 11 legacy system extract files into a single statement, including a summary page with every account listed with its balance. Dynamic marketing messaging was deployed across the entire statement, including the cover page, individual account pages, and space at the end of the document. By combining several individual statements and statement formats into a single, consolidated account reporting statement, Fidelity increased customer satisfaction, and significantly reduced operational delivery and production costs.
More recently, other firms have discovered the benefits in moving to a relationship statement format. In September 2005, Merrill Lynch received Dalbar’s endorsement as top rated in the newly created relationship statement subcategory for its new client statement. The new subcategory was formed to measure financial firms’ abilities to provide clients with combined information on all their accounts.
Merrill Lynch’s relationship statement consolidates information from multiple accounts into a summary report with portfolio pages. Each portfolio page focuses on a statement summary, a list of all accounts, a balance sheet, a portfolio review, and a monthly income gain/loss review. With this at-a-glance approach, Merrill Lynch financial advisors are able to identify the needs of their clients, assess progress, and suggest solutions.
Solutions
Speaking of solutions, several vendors now offer products to aid organizations in creating complex relationship statements. Key to the creation of these documents is a strong data handling and processing component that allows for the management and synchronization of multiple, disparate data input files. Ensuring that all of the data necessary for a statement, and that no additional or erroneous data is included is critical, as many of these systems operate at very high volumes and individual auditing and quality control is impractical.
Many vendors’ offerings specialize in relationship statements and are often found in banking and financial services environments. A robust graphical user interface (GUI) enables organizations to develop complex statement layouts with efficiency and ease. The ability to create a relationship statement depends on a deployable design that can be recreated within the selected solution. This is a critical function, and all these products either support or supply a GUI.
Docucorp Docuflex supports a wide range of applications with an emphasis on personalized customer communications. The solution strives to encapsulate the core technology into Web Services and extend integration with vertical market applications and industry-specific forms libraries. The software is suitable for long or complex text documents within any industry.
Document Sciences’ xPression is a strong fit for creation and content-to-print of personalized and static documents. The solution’s focus is a fit within business processes and provides content integration and delivery of interactive, on-demand, or high-volume business communications within vertical applications. The product is well suited for regulated, transactional documents.
Exstream Dialogue supports a wide range of applications with an emphasis on personalized customer communications and marketing campaign management. The solution provides enterprise personalization and consistent cross-channel messaging. Dialogue supports multiple integration mechanisms for corporate applications, such as customer relationship management and enterprise content management. The software is suitable for large organizations across industries as part of an enterprise output strategy.
GMC PrintNet T Triple Suite supports both promotional and promo-transactional applications with strong functionality for color and variable PostScript. The solution has both PC and Macintosh design clients. PrintNet Connect enables easy integration with enterprise applications to automate personalized customer communications. A process automation engine supports online order entry and manages print scheduling. The suite is suitable for both corporate and service bureau environments.
Group 1 DOC1 is a multi-channel solution for customer communications with modules supporting the entire development-to-production process. The product integrates with corporate systems to share data and manage content. The product also supports a range of applications in the financial services, utility, telecommunications, insurance, government, and service verticals, including transactional, promotional, and text-based documents.
Metavante CSF Designer’s feature set and output methods support transactional and correspondence applications for large departments and enterprise deployments. The product supports high-volume batch and on-demand processing of transactional data across all vertical industries. CSF Designer is integrated with Metavante’s presentment and payment applications.
The Future of Relationship Statements
It’s clear that relationship statements are here to stay. They offer organizations the opportunity to improve customer satisfaction and comprehension, as well as reduce costs and customer churn. How quickly organizations make the shift from traditional statements, however, may lie in how these new documents are designed, which personalization components will be adopted first, and which designs win favor with clients. Additionally, once deployed, firms will need to reconcile the cost of using color printing for relationship statements with the increased revenue and savings that are realized upon implementing such statements.
Today, relationship statements may be reserved for an organization’s top tier of customers. But it’s only a matter of time before consumers of all stripes will receive all of their financial information from a particular institution as a single monthly statement that’s easy to understand and personalized with messages to enhance their financial-planning experience.
