How the financial services industry can compete in an increasingly digital-first age
If you had asked me 10 – even five – years ago if I could imagine the day would come when I could quite easily open up a bank account online, I probably would have just laughed it off. After all, the experience of walking into a branch to meet with an account representative who would have me complete and sign endless amounts of paperwork to make me an official banking customer seemed par for the course – and never changing anytime soon. Not to mention, all of the privacy concerns, security restrictions, and other regulatory red-tape that would make online financial transactions seemingly impossible.
To be honest, I couldn’t tell you the last time I visited an actual bank branch. I do most of my banking online these days. So, if there’s one thing we’ve all learned in the last few years, it’s that technology has a very real power to transform and shape culture, business, and behavior. It is now practically a part of every interaction that takes place in our daily lives. To think that the banking and financial services industries would forever be immune to technology’s widening grip may have just been denial, in hopes that the predominantly analog status quo of the industry would prevail. Although regulatory and legal requirements haven’t changed – if anything, they are now stricter than ever before – we’re quickly seeing technology become a catalyst for change, helping to liberate an industry so encumbered by those constraints. Technology is, therefore, helping the financial services industry take its first steps into what will likely be a digital-first future.
The fact of the matter is that financial technology (aka, “fin-tech”) is here to move the industry forward, not give it reason to panic. Traditional financial services businesses need to get out of the all-too-common old way of doing things, if they even want to have a glimmer of hope of competing with the new digital-first entrants into the space.
While most brands have started to dip their toe into the “digital pool,” this rapid evolution into a more digital-first mindset goes well beyond day-to-day banking, with players like Monzo and Tesco Bank already disrupting the industry in a big way. Technology has impacted – and you could even say, simplified or made more accessible – the way people invest (Moneybox), manage their entire financial portfolio (Nutmeg) and even file and pay for taxes (TurboTax).
Simple tasks that once required the intervention of a seasoned professional are increasingly being automated through smart and convenient technology. This isn’t to suggest that technology has completely taken over. There are still moments when human interaction is necessary to complete a task. The benefit of all this technology, however, is that it helps identify the exact moment when humans need to take over, helping to improve the overall efficiency and effectiveness of customer support teams. Not to mention, it helps build confidence and trust (more on that in a moment).
So, while there are seasoned professionals somewhere in the background being support in a big way by all this technology, you could easily say that the relationship customers have today with the entire financial services industry has been fundamentally flipped on its head – all thanks to technology. No question about it, fin-tech is thriving. Do you want to be left behind?
Now, before any of us get carried away, it’s important to keep in mind that, in a recent survey commissioned by Lithium, only 23 percent of adults in the UK said that they trust digital more than other forms of banking even though 59 percent said they would prefer to bank through digital channels if the trust element were there. Conversely, 58 percent found in-person banking to be the most trustworthy. This reveals that consumers today are facing a dilemma between convenience and trust as technology becomes more a part of the financial services industry.
Here lies an opportunity. When consumers are faced with complex banking issues, 60 percent of adults in the UK said that would have to sort it out in-person while a meager 15 percent would look to digital first to get the answers they need. Although this may be the case now, it’s highly likely that the balance could soon tip in the opposite direction. New entrants into the financial services industry are getting a lot savvier about how they leverage and amplify their digital presence – dotcom, online community, social channels and in-app – which all comes down to building a better overall digital customer experience. Doing so builds trust. Trust builds loyalty. The only difference today is that technology is quickly becoming a driver of trust.
This trend is already well underway. The simple fact that fin-tech brands are already gaining so much attention and traction with consumers, especially among digital-first millennials, is a sign that high-street banks and other more traditional financial services providers are the most at risk to lose business to these new, more agile entrants into the market.
Fortunately, there is still time to get on board with digital. Keep in mind, though, it’s about more than simply making an investment in it; it’s about making a conscious decision to redefine the end-to-end customer experience, wherein digital sits at the heart of it all. Doing this will not only continue to build on the trust that consumers have with your brand, but also help them see you in a new light – one where speed, efficiency and convenience around addressing their needs and resolving their issues is consistently your top priority.
Although there is no one-size-fits-all recipe for success, there are a few things you can do proactively to implement a winning digital strategy:
Embrace Technology: You need the right systems, processes and platforms in place to automate, streamline and unify the customer experience across all digital channels.
Know Your Customers: The more you know about your customers’ needs, the better and more personalised service you can provide them. Data can help you develop actionable customer insights that make it easier to meet and exceed customer expectations.
Empower Agents: Agents must have a comprehensive view of the customer to address their needs efficiently. Creating holistic customer profiles using your customer data will equip agents with information to help them be more effective with every interaction.
Share Information: The digital customer experience is everyone’s responsibility, not just the marketing or customer support team’s. Create as much transparency as possible around your digital efforts to ensure the entire organisation knows what’s happening.
Streamline Content Delivery: Coupling customer data with automated content publishing and recommendation tools takes the guesswork out of identifying what kinds of content your customers want and expect from your brand.
Build Community: An online community allows your customers to interact and collaborate with each other as well as ask questions and get answers, which can alleviate the costs and pressures placed on customer care teams.
Measure Performance: From social media analytics to marketing campaign metrics to customer data, you must measure every customer interaction across every digital channel to ensure you deliver a premium digital customer experience at all times.
The emergence of fin-tech is a good thing – and, truthfully, shouldn’t be seen as a threat to your business. That is, only if you use it to your advantage. Fin-tech is pushing the boundaries of what’s possible in the financial services industry and, if you heed its call, it can help you build a solid business case for launching your brand into the digital age or expanding your current digital presence, making way for a better and more cohesive digital customer experience. The number of digitally-minded consumers is growing every day. They value convenience, speed and efficiency. By embracing fin-tech, and deploying it with your customers’ wants, needs, and expectations squarely in mind, you can give your already-loyal customers a reason to stay loyal despite growing competition.
This article was originally posted on International Banker.
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