The financial services industry was built on trust, historically through one-to-one human interaction. While customers continue to deal with complex financial needs, they have more choices than ever before. The challenge companies face is replicating this trust through digital, in the palm of every individuals hand, and scaling it across multiple channels. Financial services incumbents are concerned about the long-term sustainability of their current product offerings and business models because of sustained changes in digitally enabled consumer preferences.
Today, experiences matter more than ever and financial services institutions should not “sell products,” but create experiences that provide guidance, empower and enable consumers to control their money. Customer expectations are never static, and experiences are now table stakes. In an industry with new players, large and small, how do financial institutions keep up with the needs of their customers and deliver trustworthy experiences that scale?
What is disrupting the industry?
Customer expectations rise, as threats from the tech giants loom in the background.
Digital is driving consumers to evolve their demands and expectations.
- 36% of consumers say the primary reason they think about switching banks is simply poor service.
- 40% of consumers say they would stay loyal to their bank if they provided more personalized services.
Disruptive FinTech companies are setting new standards for managing money
- While FinTech startups have not gained significant market share, we are seeing a shift in consumers using non-traditional players to manage their money.
- 45% of financial services companies are concerned with losing market share to new players, which includes the tech giants looming in the background.
- In the US, over half of millennials would consider banking, insurance, and investment products from a company like Amazon or Google (Accenture).
The shift to digital channels requires a new approach to omni-channel strategies.
- 46% of consumers only use digital channels to interact with a bank. This gives mobile-only startups an advantage as they are starting from scratch without the overhead of branches or legacy infrastructure.
- Consumers expect that you should know them every step of the way, and that the existing touch-points should be connected. To increase customer satisfaction, companies need to stitch the existing channels together and remove friction.
Regulatory environment slows innovation and increases importance of security and privacy.
- Globally, regulations cost banks over $4 billion annually.
- Emphasize Spend on regulation / compliance / auditing.
- Org/tech implications of this (slower time to market, need technology to process data correctly and setup governance as the data controller)
- Financial firms not only have to pay for these regulations, but it slows them down in bringing services to market.
- As the controller of this critical data, financial services firms are under pressure to setup the right data governance and technology.
What is the industry doing about it?
Financial firms gain traction in digital and customer focus.
As customer expectations increase, financial institutions are rising to the challenge by launching new digital services as well as orienting around the customer. The top three most important strategic responses to counter the competitive threats and rising customer expectations:
- Digitization / Modernization - Launch of new product / service introduction esp. launch of new digital transformation offerings (36% top 3 response)
- Increased focus on customer centricity - Developing more agile customer processes (30% top 3 response)
- A greater focus on innovation across the business (26% top 3 response) – use of chat bots, process automation, creation of new markets like un-derserved individuals
What should our customers do?
In financial services, trusted relationships are what matter. And trust starts with experiences that not only connect across channels, but connect emotionally with customers. With data and technology, we can exceed expectations, simplify lives and deepen customer relationships through the achievement of meaningful outcomes at scale.
The next wave of innovation around customer experience requires technology-enabled capabilities across data and content to build, manage, and deliver an experience that delights customers and drives business impact.
- Fragmented data and marketing systems. An overwhelming amount of data, with limited coordination between tools and teams, makes it nearly impossible to extract actionable insights and create connected experiences.
- Lack of digital marketing skills and limited coordination between teams. Limited expertise in how to execute digital transformation compounds the anxiety related to fierce competition that is defining new routes to market and customer engagement.
- Product-centric vs. customer centric. While this is changing, traditionally financial services firms have been organized around products, not customers’ experiences.
- Insufficient focus on digital performance. Lack of real-time insight into customer behavior, context, and engagement limits the ability to refine campaigns and deliver high-value experiences.
- What percent of your sales and new accounts are coming through digital channels?
- How are you planning on growing your client base using digital channels?
- How connected are the teams responsible for each customer channel? Do they leverage the same tools?
- Do you have an understanding of what channels your customers prefer, and do you personalize their experience based on that information?
- How do you resolve the identity of your customers between online and offline interactions? Is their digital behavior reflected in your understanding of individual customers?
- How confident are you in your ability to deliver consistent, coordinated and personalized offers across channels? How effectively can you attribute the impact of each channel or combination of channels to a business result?
How To Become An Experience Business
Use identity resolution to build a unified customer profile, allowing you to deliver experiences based on their behavior, transactions, and context.
- Can correlate 95% of marketing touches to asset movement (Scottrade)
- Global credit card company used closed loop acquisition to gain 10% increase in media efficiency, 25% increase in conversion, 2X increase in high-value conversions (Blind, AAM, AA, AT)
- Combining customer data for use with paid media gave a European Insurance company a 70% reduction in X-sell CPA and 10X retargeting reach (AAM, AA)
- Integrated online and offline data for one customer view across brands and channels, resulting in 14% increase in conversion (Progrexion)
Streamline the workflow required to orchestrate personalized experiences at scale while delivering consistent content across all channels.
- Retired 40 CMS systems and can now make site changes 42% faster (RBS)
- 3x faster and more efficient publishing with increased personalization (UBS)
- Can publish content 15 minutes after its been written, 23,000 pages per year (BNP Paribas)
- Centralized all content production with one team and consolidated website from 1,200 to 250 pages (Manulife)
Leverage machine learning and automation to deliver personalized next best offers to high value audiences.
- Personalized and targeted campaigns lead to 40% increase in conversion rate and 64% increase in online deposits (Credit Agricole)
- Personalization made customers 70-80% more likely to engage/adopt a product (RBS)
- 30% decrease in cost-per conversion via use of 1st-party data in media re-targeting and site side personalization (Bank of Canada)
- Automated personalization led to 109% lift in click through to product pages from top slot (HSBC)
Optimize the customer journey with real-time insights across touch points, online and offline, to drive purchase behavior and loyalty through meaningful content and context.
- Measurement, testing, and optimizing resulted in 45% lift in conversion, 3000 more credit card applications (National Bank of Australia)
- Used highly targeted segments to run 31% more campaigns per year, and see 4.5% increase in campaign response rates (Baxter Credit Union)
- Conducted 50 tests in the first year of new data-driven strategy (Bank of Canada)
- By automatically adjusting campaigns with AB test results, Raiffeisen has tripled conversions such as event sign-ups and scheduling meetings with financial advisors.