When Dame Alison Rose took over as CEO of NatWest Group in 2019, she made history as the first woman to lead one of the UK’s four big banks. But the challenges she faced went far beyond breaking gender barriers. The bank had declining customer scores and poor profitability, with a return on equity of around 4% – well below the cost of capital. Despite having “customer first” embedded in its values for a decade, the reality was that NatWest was delivering neither great service nor great value for shareholders.
Today, after implementing a purpose-led, customer-centric strategy, NatWest has transformed into an organisation that balances customer service excellence with strong financial performance. Here’s how Dame Alison Rose accomplished this remarkable feat and the lessons other businesses can learn from NatWest’s transformation journey.
Identifying the Gap Between Intent and Reality
“With over 30 years in the financial services industry, I have sat in many meetings and strategy reviews where people have talked about a customer-led or customer-first strategy – and yet how that manifests and is experienced at the grassroot level and how it is filtered through an organisation can be vastly different to the intent,” Dame Alison explains.
This disconnect between intention and execution was precisely the problem at NatWest. Despite a genuinely embedded belief that it was a customer-led organisation from branch staff to wealth managers to relationship managers, the customer experience told a different story.
The bank had been measuring success through singular metrics like NPS (Net Promoter Score), and although scores were improving against previous performance, relative performance compared to peers remained poor. Meanwhile, shareholder value was suffering.
Recognising Organisational Complexity
Part of the challenge was the sheer complexity of NatWest’s operation. As a multi-customer franchise, the bank was serving diverse types of customers (B2B, B2C), through multiple channels (face-to-face, remote, digital, AI), at different scales (small to vast), and across multiple geographies and regulatory environments – operating in 38 countries.
This organisational complexity made creating a unified customer experience extraordinarily difficult. The structural divisions of retail, commercial, corporate, and wealth – while necessary from operational and regulatory perspectives – didn’t match how customers were actually interacting with the bank.
Dame Alison discovered that 65% of retail customers were also customers in other divisions of the bank – perhaps running side businesses, investing wealth, or using credit cards. Yet these customers were treated as separate entities across divisions rather than as whole individuals with diverse needs.
Meanwhile, the bank’s measurement framework was out of step with changing customer behaviors:
- A key driver of customer satisfaction measurement was branch experience, yet 85% of products were not sold in branches
- 85% of transactions were conducted online
- The fastest growing segment using cash was the younger generation, countering assumptions about digital-only youth
- 40% of families were not living in a nuclear family structure, challenging traditional service models
- Customers’ brand attribution was retained for just two minutes if efficiency wasn’t immediately delivered
- 40% of customers were investing in cryptocurrency, with the under-24 demographic interacting primarily through digital and gaming-related channels
Bridging the Complexity Gap
With this understanding, Dame Alison set out to re-center the organisation around creating long-term value for customers, shareholders, colleagues, and communities. She recognised that in an increasingly competitive and diverse market, NatWest couldn’t take its reason for existing for granted.
“We wanted to bridge the complexity so we could create short-term and long-term value – to be customer-centric, recognising the complexity of our customers, and drive value for our shareholders in both the short and the longer term,” Dame Alison says.
The approach was built on several critical pillars:
1. Measuring from the Right Starting Point
One of Dame Alison’s first steps was to assess where the bank truly stood with customers. As she explains, “To know where you want to get to, you need to know where you start from. Solving a problem when you don’t know you have one is a major step.”
This was particularly challenging in the commercial division, which had the highest NPS scores in the industry. Yet when she broke down the data, Dame Alison discovered that customer acquisition was actually the worst in the industry. At the scale-up point where value accelerated, customers were moving to competitors. The bank’s offering was over-complex for small customers and over-simplified for complex ones.
“We had to go through a mantra – to know the answer, you had to admit you had a problem – and then you could think of how to solve it,” she explains.
2. Understanding the Customer Lifecycle
Dame Alison recognised that customers, “like children, have a habit of growing up and their needs evolving.” This lifecycle perspective was critical for creating long-term value.
For example, NatWest had long dismissed investing in a youth strategy as merely costing money without creating immediate value. But Dame Alison’s analysis revealed that meeting the needs of children meant banking their parents – and data showed the bank made twice as much from parents during that period. What had been seen as a long-term investment with no short-term return was actually creating immediate shareholder value while building for the future.
Under her leadership, NatWest grew its youth market share from 3% to 17%, transforming from the worst-rated brand for under-35s to the best.
3. Focusing on What Customers Truly Value
Dame Alison drew an important distinction between what banks measure and what customers truly value. She recognised that “day-to-day satisfaction – making yourself invisible – isn’t valued until it goes wrong.” Yet when things do go wrong, they become highly destructive to customer relationships and costly to fix.
By investing in customer journeys – such as removing the 40 different steps in delivering a loan – NatWest improved efficiency, reduced errors, and removed costs while simultaneously improving the customer experience. The NPS on loans increased by 70%.
“Don’t neglect the boring, unsexy stuff – because the cost, experience, and value destroyed or created from this has multiple impacts across the customer experience and value creation of the organisation,” Dame Alison advises.
She also recognised the “moments that matter” to customers – buying a house, teaching children about money, building financial confidence, or getting help after being scammed. These touchpoints aren’t about financial products but about life events and needs.
4. Aligning Measurement with Outcomes
Dame Alison observed that “what gets measured gets done” – but this mantra needs careful implementation in large organisations.
When NatWest identified that customer satisfaction correlated with relationship manager contact and set targets accordingly, contact levels went up but customer scores went down. The problem was that the same customers were being called multiple times rather than reaching more customers with quality interactions.
To address this, Dame Alison shifted to balanced scorecards that measured financial outcomes, risk outcomes, customer experience, economics, and culture. This allowed the bank to offset scenarios where they might beat financial metrics but deliver a poor customer experience.
Results of the Transformation
The impact of Rose’s strategy has been remarkable:
- Market share growth in targeted customer segments, including youth (from 3% to 17%) and entrepreneurs (to 17%)
- Affluent customer NPS improved from -7 to +35
- Commercial banking achieved #1 position with the best-rated relationship managers
- Staff engagement rose well above the global financial norm
- Risk metrics and error rates improved consistently
- Customer complaint levels dropped by over 30%
- Return on tangible equity improved from 7% to 19%
- The bank distributed £10 billion back to shareholders and outperformed the market by 18% in share price
The Lessons for All Businesses
Dame Alison Rose’s transformation of NatWest offers valuable insights for any organisation seeking to become truly customer-centric while delivering shareholder value:
- Recognise the gap between customer-first intentions and customer experiences
- Understand how organisational structures may not align with how customers actually interact with you
- Measure from an honest starting point, admitting problems even when headline metrics look good
- Take a lifecycle view of customer relationships
- Focus on the moments that matter to customers, not just product delivery
- Create balanced measurement systems that prevent unintended consequences
- Align your culture across the entire organisation, including non-customer-facing roles
As Dame Alison concludes, “Customers deserve great service and great insight, and organisations have at their disposal today tools and technology to allow us to deliver greater understanding and value… NatWest moved from worst to best both in terms of its customer acquisition, retention, and feedback as well as best-in-class returns for shareholders – ensuring we balanced the short term with long-term value creation.”
