Consumers’ interactions with Financial Services are increasingly virtual. Customers want to buy products, switch services, and access their accounts 24/7, all while expecting a digital customer experience already defined by Amazon, Facebook and eBay. But of course, financial institutions were born in the industrial age and their technology legacies and legislative compliance tend to constrain such innovation.
However, these organizations cannot afford to hide from the tide of digital disruption - McKinsey & Company provides a stark warning that “banks have three to five years at most to become digitally proficient”. The time to choose between embracing innovation or risk being left behind is now.
But it’s not all doom and gloom. There are fantastic opportunities to innovate within these constraints and we’ve carried out some research to find out which top three things financial services organizations can focus on in order to remain competitive.
According to the Harvard Business Review , the number one factor in customer loyalty is reducing customer effort. Despite reports in the media of hysteria surrounding the closing of bank branches, a recent study showed that most customers either don’t use or don’t really care about local branches. Being able to access a local branch is no longer behind their choice of bank.
Customers live in a world where Amazon is delivering on the same day and creating stores without checkout lines. Similarly, customers are telling their financial services providers to not only accelerate their digital offerings, but to make them as convenient as possible.
The winning financial institutions will be those who push digital experience up the priority ladder from being a ‘nice to have’ to an absolute necessity, cost effectively providing these services and rolling them out to their customers.
2. Artificial Intelligence
Yes, it’s much hyped, but Artificial intelligence (AI) is here and KPMG estimates that financial the services firms which get on board with automation could save up to 75 percent in costs — if they do it right.
AI goes hand in hand with our first trend, ultra-convenience, as an increasing number of customers may never even use a physical bank location. Already, 46 percent of consumers say that their banking needs are met solely by digital products, so it is imperative for financial organizations to provide these services cost effectively - a perfect use case for artificial intelligence.
Wells Fargo, a company which has been around 166 years has embraced this technology , predicting that it will become a powerful customer services solution, with chatbots, predictive analytics, and real time fraud prevention.
And yet there is are still challenges. According to an HSBC report , right now more consumers would actually be willing to let a robot perform heart surgery on them than let one manage their personal finances! Making automation and AI feel personal, effortless and safe will be key for financial institutions as they implement smart automation.
While our research has established that people aren’t going into branches, one of the customer experience challenges in financial services industry right now is omnichannel - maintaining a consistent service as customers switch between mobile apps, branches, phone banking, internet banking and other ways of managing finances.
Back in 2015, Halifax (part of the Lloyds Banking Group in the UK) reported that nearly half (45%) of its customers use a combination of online, mobile, telephone and branch banking to service their accounts.
The ability to keep pace with this change requires not just a transformation of mindset and processes, but technology – as Ernst & Young states in its “ The Way we Bank Now ” report:
“..the need for flexibility in the technology platform. To be able to dial channels up and down quickly in response to customer demand, banks’ IT infrastructure needs to be able to adapt at pace. This may require systems to be upgraded and updated for the digital age.”
It’s clear that banking is evolving into a high-tech industry run on apps and mobile devices. These are only a few of the trends that highlight the opportunity for banks to invest in digital transformation. To learn more, download the HOT DAM 10 Trends in Finance
HOT DAM 10 Trends in Finance
As the speed of digital transformation ramps up, it’s critical that financial institutions keep pace. The right digital experience will ensure that your institution remains competitive in this customer centric digital era.Read More in the Whitepaper