Did you know that 35 days is the average that a new technology takes to attract 50 million users in Silicon Valley? In a world where it takes a little over a month to attract and retain customers, companies have never been more serious about putting the customers first through strategies that resonate with their emotions.
While meeting customer’s needs has been one of the cornerstones of any business strategy, business leaders will soon, if they have not already, realise that strategies have evolved to be customer centric across all pillars – by understanding how the client engages with the business from the pre-sale to the post-sale interaction, how the business makes the customer feel, and how the full experience can be improved across each potential interaction point.
According to Strate CEO, Monica Singer, it’s about under promising and over delivering using technology to improve what customers may experience. “Technology allows people to feel connected, so the use of advanced technologies, such as big data, distributed ledger technology, the Internet of Things and machine learning, are playing a huge role in how we make our customers feel, which underpins the success of the business.”
Singer adds that with the rise of a tech-savvy generation of clients, businesses need to embrace being innovative through design thinking and technological advancement to remain relevant and be competitive in today’s dynamic environment, or risk becoming obsolete.
Strate, as a Central Securities Depository serving South Africa, has existed since the 1990s and incorporated innovation into its business model from the beginning. By understanding global best practice, engaging stakeholders to regularly assess market dynamics and needs and keeping abreast of the latest technological advancements, it introduced many market changing solutions that add value to clients. One such example is a collateral management solution that would help bolster liquidity in the face of regulations, such as Basel III, that would threaten the balance sheet of many banks. However, Singer says that while the business brought this innovative solution to the market, it had to up the ante, which is one of the reasons the company’s collateral solutions can look at cross border collateral transfer using Distributed Ledger Technology, or that soon, it will also be offered using Cloud Computing.
“We have the alpha generation of customers who have been born after 2010 in a technological world. Everything they learn is from technology. Children are likely to learn things now from YouTube before they do from their teachers. Over the next two decades, businesses can’t be asking this generation to fill out paperwork, these businesses need to evolve to generate loyalty from the alpha generation and beyond,” she adds.
Design thinking is a collaborative process that is human centred. Businesses need to look at the whole pattern in the ecosystem and, through collaboration and the facilitation of social interaction, understand the full customer experience. They then need to combine left- and right-brain thinking when approaching their strategies to be analytical and intuitive when defining the emotional needs of customers without being held ransom by the needs of the product or service.
“It’s hard to kill your own product, but rather be the one to do it first before others do. If you are not using a design thinking approach, your customers may just kill the product as they did with Kodak, a giant which no longer exists thanks to innovation with mobile technology,” explains Singer. She elaborates that businesses need to spend three quarters of their time holistically looking at the whole ecosystem to understand it, then focus the rest of the time on product development. “Once businesses understand the ecosystem, they should create ideas without limitations and prototype those ideas with the market to get feedback, then improve on those ideas by combining customers’ needs with their aspirations.”
While evolution is key to keep up with the unprecedented rate of change, some businesses need to acknowledge that they need an ambidextrous strategy with leadership that too, can apply ambidextrous thinking. “Yes, companies need to establish themselves to be relevant in the future, but there are many cases where they need to nurture the core that currently serves the market. This happened with the media a number of years ago when digital news and Twitter threatened to be the demise of print media, yet print still exists because there is a market for it that wants to turn the pages of a newspaper or magazine. As the environment gets more competitive, companies need to remain relevant by designing their strategies around the customer; Strategies that continue to build trust by understanding the customer’s point of view, where customer-centric solutions are designed with this in mind.”
Similarly, a company like Strate has to nurture and evolve its core, while explore disruptive technologies. During 2016, it created two divisions within the company, CSD Operations and Fractal Solutions to achieve this. While initial thoughts would be that disruptive technologies could, and may even still, threaten the core business of CSDs – there is more of a case that they complement the business model and can drive solutions that address business problems across the ecosystem. One such example is proxy voting for corporate actions, which is admin intensive and flawed. Fractal Solutions has been working closely with the market to develop an e-Voting solution using Distributed Ledger Technology. The CSD is also looking at its big data capabilities to create value-adding solutions that provide further insights to clients.
Elsewhere within the business, the company continues to incorporate design thinking to address the needs of clients within the current model. Traditionally, financial markets have existed with one stock exchange and a Central Securities Depository. In South Africa, this is no longer the case after multiple exchanges were awarded licences after the country existed for more than 100 years with a single service provider, which has been a client of Strate’s since the CSDs inception. The new exchanges have also appointed Strate as their CSD, and Strate has had to show its flexibility and innovative thinking to understand their respective business models to create bespoke solutions for each.
Singer explains that it still remains a necessity to serve the market loyally and maintain the high-levels of service delivery, but it is also imperative to adopt the most advanced technologies and models that make you a best-of-breed company. “To survive, businesses need to be innovative to keep up with the rate of change of a new breed of customers. To thrive in this new era, businesses must choose to notch it up another gear and adopt design thinking with advanced technologies, without losing sight of the current market’s needs,” she concludes.