What is the role of the Board in driving powerful communications in the B2B financial services marketplace? Their influence should lead to more profitable customers, but how?

In the business to business (B2B) market place, powerful communications are those that lead current clients to become more profitable – So why are there so many ‘transactional’ business and information technology (I.T.) communications initiatives that don’t seem to directly support this objective? Why has the board often allowed this to happen and how could board members contribute differently in future?

Readers within and outside of  the international financial services marketplace might expect to see best-practice examples here, but while many things are done well there remains a huge opportunity to do even better! London’s capital markets and commercial insurance markets highlight some interesting learning points for us all.

The focus of capital markets

In the Capital Markets arena there is always strong focus on transaction speed, cost and quality too. Of course these capabilities are important to clients as they expect orders to be processed quickly and accurately. It can also be extremely expensive to administrate the recovery of failed transactions and the resulting claims settlements. In IT-speak people talk about ‘records management’, this transactional approach is essential for assurance and auditability but can easily lead to losing sight of the client’s expectations and experience.

“When client’s make contact with their provider they don’t usually consider that contact to be an isolated transaction, more likely it is one of  series of contacts and activities that lead towards a result” says Terry Hook, Financial Markets Business Development Manager at Getronics. “For example a call to complain that a previous request didn’t complete satisfactorily is not a stand-alone transaction, instead it is often part of a ‘case’ or series of contacts that lead towards problem resolution and ‘job done”.

The relevance to the client of each individual activity isn’t sufficiently understood or addressed by most companies, with administration and claims teams failing to have the required skills and resources to play their full role in maintaining the business of key clients. Millions can be lost when a client stops even one months trading through your business while a backlog of outstanding issues are resolved and the relationship temporarily recovered.

Powerful communications are supported by a view of the business which is not only internal or transactional in nature. Instead transactions need to be linked together to understand the external customer experience and the way individual communications need to work in tandem to build towards a powerful client communication. Back and middle offices need to be given direction and funding to be part of the front office business development approach. In this way client needs start to be recognised and addressed across the organisation, so that clients will stay longer and spend more. 

Lloyd’s and the London Insurance Market

In response to regulatory and other market demands the London Market Reform Group (MRG) are making good progress with process and systems initiatives required by the Financial Services Authority (FSA). However the MRG recognise that most of these initiatives simply replace existing paper files or manual processes and focus the use of market standards on improve the basic efficiencies of I.T. and interchange systems. While a service benefit can be gained there is little innovation and therefore no substantial effect on international competitiveness unless other activities also take place.
 
Just as in the capital markets example, these commercial insurance transactions need to be completely quickly, at high quality and with low cost. Initiatives such as the Electronic Claims File (ECF), Accounting and Settlement (A&S) and Electronic Endorsements provide standardised ways to address transaction and record management for London Market operations. “In this role, existing files and processes become standardised for efficiency and service, however I.T. can too easily be seen only as a follower rather than innovator of powerful communications and new business approaches” says Neil Hodges, London Market Insurance lead for Q.Know Technology.

Amongst these initiatives perhaps the most successful and high impact to date is the use of email and document attachments for completing electronic endorsements (which request changes to existing insurance policies). This is because business to business professionals now spend most of their productive time in front of an email system such as Outlook ™ and increasingly they expect to do business with other companies via email rather than directly using back-office I.T. systems. Of course using email as your primary workbench becomes dependant on integrating communications, processes and back-end transactions tightly within the email environment. Such an approach enables each company to move at their own speed, to mix communication styles (including coffee bar meetings and phone calls) to create powerful communications and to innovate when dealing directly with demanding key clients.

As far back as the 1906 San Francisco earthquake Lloyd’s made its name as a source of trusted international insurance, so while considerable business takes place within the London market substantial amounts still come directly from international brokers and clients located elsewhere. In the competitive international market clients expect their needs to be understood and responded to, yet many of these clients are unlikely to use London market repository services and instead they increasingly communicate electronically via email. Many executives in the London Market already recognise that pushing more communications towards electronic media only serves to complement, rather than replace, the many powerful face to face meetings and follow-up telephone calls that develop business through powerful communications.

“If companies only deliver systems to meet current electronic market initiatives this could overlook the threat to Lloyd’s pre-eminent position” says former Lloyd’s underwriter and independent market adviser Syed Hossain. “This is a turning point for Lloyd’s, as the best companies will use IT to drive innovation and change in the way they communicate and deal with their international clients. As technology makes their markets more transparent as well as global, to them the delivering of systems for MRG and FSA compliance alone may not be sufficient”.

Achieve powerful B2B communications

While many B2B companies are focused on systemising historic files, processes and transactions, the best FS companies see beyond the internal challenges of record and transaction management. Of course each company needs to deliver its services in a manner which is timely, cost effective and high quality. However too much focus on internal matters can take focus and effort away from what is most important for the external client – and therefore most important for future profits too.

Powerful B2B communications are those which recognise the completeness of the clients need, use I.T. systems and electronic transactions to complement face to face and telephone client management, use I.T. as an innovator rather than as a follower, integrate systems into the B2B professionals email workplace.

Achieving this change requires personal attention from those who can stand back a little from day to day operations, including executive and/or non-executive board members. However a recent study by Doctoral Researcher Peter Hahn of City University shows that many boards need to meet more frequently to have sufficient direct impact in aligning critical operational initiatives such as powerful communications and I.T. with their strategy for the development of the business.

By Bryan Foss,
Founder, Fossinitiatives.com

Email: bryanfoss@gmail.com