The Shift from Product-Centric to Customer-Centric Models in Commercial Banking—A Blueprint for Transformation
Commercial banking is at a pivotal crossroads. As digital-first challengers and evolving customer expectations reshape the landscape, traditional product-centric models are no longer sufficient to drive growth, loyalty, or operational efficiency. The imperative is clear: commercial banks must move beyond product silos to deliver hyper-relevant, personalized experiences for business clients. This transformation is not just about technology—it’s about reimagining the very foundations of how banks operate, serve, and create value.
Why Customer Centricity Now?
The urgency for change is driven by several converging forces:
- Competitive Pressure: Challenger banks and specialist lenders are rapidly gaining market share, especially in SME segments, by offering seamless digital experiences and tailored solutions. In the UK, for example, challenger and specialist banks accounted for 59% of total gross lending to smaller businesses in 2023, outpacing the big five banks for the third consecutive year.
- Rising Customer Expectations: Business decision-makers are increasingly digitally savvy, expecting the same frictionless, personalized experiences they encounter in retail banking and consumer tech. Yet, 71% of commercial banking executives admit that evolving customer expectations are exposing weaknesses in their bank’s customer experience.
- Operational Agility and Innovation: The pace of change is accelerating. Banks must be able to pivot quickly, launch new propositions, and respond to market shifts—something legacy systems and siloed operating models struggle to support.
The Pitfalls of Product-Centricity
Traditional commercial banking models are organized around products—current accounts, lending, payments, and so on. This structure leads to:
- Fragmented Customer Journeys: Clients face disconnected experiences as they move between products or segments, often feeling like they are switching banks rather than growing within one.
- Slow Onboarding and Access: Data is siloed, requiring customers to repeatedly provide the same information, resulting in onboarding times that can stretch to 30 days or more.
- Missed Opportunities for Proactive Engagement: Relationship managers are often limited by their own product knowledge and incentives, rather than being empowered by holistic customer insights.
- Inconsistent Digital and Human Touchpoints: Digital channels are typically designed for cost efficiency, not differentiation, and are poorly integrated with high-touch relationship management.
The Customer-Centric Blueprint: From Selling to Solving
A customer-centric model flips the paradigm. Instead of selling products, banks focus on solving customer problems and anticipating needs. The benefits are clear:
- Proactive, Relevant Advice: Banks use data and analytics to understand customer context—such as expansion plans or market events—and offer timely, tailored solutions.
- Faster, Frictionless Experiences: Once data is collected, it is accessible across the bank, enabling rapid responses to new needs and reducing onboarding times from weeks to minutes.
- Consistency Across Channels and Segments: Customers enjoy a unified experience, whether engaging digitally or through relationship managers, and as they grow from small business to mid-market.
- Broader Value Proposition: Banks can extend their offerings beyond traditional products, providing sector-specific advice, risk management, and connections to partners and services.
The Building Blocks of Customer Centricity
Achieving this transformation requires bold changes across technology, data, and operating models. Here’s how leading banks are making it happen:
1. Coreless, Modular Architecture
Modern commercial banks are moving to cloud-based, coreless architectures. This approach:
- Breaks Down Silos: Decouples data and processes from individual products and channels, enabling seamless integration and rapid innovation.
- Enables Ecosystem Partnerships: Makes it easier to add or swap components, connect with third-party providers, and deliver new value-added services.
- Builds Security and Compliance In: Security and encryption are foundational, not bolted on.
2. High-Quality, Accessible Data and Advanced Analytics
Data is the lifeblood of customer-centricity. Banks are:
- Centralizing and Cleansing Data: Ensuring that customer information is accurate, up-to-date, and accessible across the organization.
- Leveraging AI and Analytics: Using next-generation analytics and generative AI to generate insights, automate decision-making, and personalize interactions at scale.
- Integrating Third-Party Data: Enriching internal data with external sources (e.g., accounting software, public registries) to deepen understanding and anticipate needs.
3. Agile, Cross-Functional Operating Models
Organizational agility is essential. Leading banks are:
- Forming Cross-Disciplinary Teams: Bringing together technology, data, operations, and customer experience experts to design and deliver end-to-end journeys.
- Adopting Outcome-Based Funding: Moving to quarterly, outcome-driven funding models that allow for rapid reprioritization and scaling of successful initiatives.
- Embedding Experimentation and Continuous Improvement: Using agile methodologies to test, learn, and iterate quickly.
4. Intelligent Digital and Assisted Channels
Customer-centric banks are reimagining both digital and human touchpoints:
- Digital Assistants and Modular Platforms: Embedding AI-powered assistants to handle routine inquiries and seamlessly escalate complex needs to relationship managers.
- Unified Workbenches for Staff: Providing relationship managers with digital tools that aggregate customer data, automate administrative tasks, and surface actionable insights.
- Consistent Experiences Across Segments: Ensuring that as customers grow, their experience remains seamless, with knowledge and context transferring across teams and channels.
5. Hyper-Relevant, Integrated Propositions
With the right foundation, banks can:
- Rapidly Launch and Refine Offerings: Lower the cost and risk of innovation, enabling continuous improvement and faster time-to-market.
- Bundle Solutions: Integrate banking products with each other and with non-banking services, tailored to specific customer needs and industries.
- Expand Value Beyond Banking: Offer advisory, insurance, and ecosystem connections, becoming a trusted partner rather than just a provider.
Real-World Progress: Insights from Benchmark Studies
Recent benchmark studies confirm both the urgency and the opportunity:
- Digital Transformation Priorities: Commercial banks rank offering new products and services, combining data for better customer understanding, and creating personalized journeys as their top digitalization goals.
- Barriers to Change: The biggest obstacles are lack of operational agility, legacy technology, and fragmented data—challenges that coreless architectures and agile models directly address.
- Case in Point: Banks that have implemented modern onboarding platforms have reduced onboarding times for SMEs from weeks to under an hour, while those leveraging advanced analytics are beginning to offer proactive, tailored advice that deepens relationships and drives loyalty.
The Path Forward: Now Is the Time for Bold Change
The shift from product-centric to customer-centric models is not incremental—it’s transformational. It requires:
- Vision and Leadership: Commitment from the top to break down silos and invest in foundational change.
- Strategic Technology Investments: Prioritizing coreless architectures, data modernization, and AI/analytics capabilities.
- Cultural Change: Fostering a mindset of collaboration, experimentation, and relentless focus on customer outcomes.
Banks that embrace this blueprint will not only defend their market position but also unlock new sources of value—for their customers and themselves. In a world where digital-first challengers are setting the pace, now is the time for commercial banks to lead the shift from selling to solving.
Ready to accelerate your journey to customer centricity?
Publicis Sapient partners with leading commercial banks to design and deliver the operational, data, and technology shifts required for true transformation. Discover how we can help you build the next generation of commercial banking experiences.