Financial Services organizations: It’s time to get a closer look at your customers
As you know, financial service industry (FSI) organizations have been in the midst of profound transformation for some time and we’re seeing a huge acceleration in line with other sectors. Globally, Statista predicts digital transformation spending will nearly double between 2020 and 2024.1 Banks, insurance companies and wealth management providers have all been racing to digitize.
Coupled with the recent pressures of remote working and new cyber-security threats, we’re seeing an accelerated shift to digital channels and self-service. With more customers taking charge of their finances online, FSI organizations are desperate to act on customer data to fuel the delivery of the personalized digital experiences that the financial marketplace now demands.
In a recent survey of 100 IT and Marketing Directors, VPs and CIOs in Finance and Insurance Services in North America1, 78% saw an uptick of customer self-service interactions and/or mobile usage. This kind of surge puts huge pressure on IT departments to ensure their systems can support marketing departments in reaching, delighting and retaining these customers. As such, FSI organizations are taking a closer look at their tech stack to see if it can deliver on customer expectations.
As early technology adopters, FSI organizations tend to be rooted in complex, disconnected legacy systems, which can prove to be an expensive nightmare either to upgrade or overhaul. Couple this with responsibility for customer’s financial security and wellbeing, and an understandable risk-adverse mentality, a complete digital transformation can feel like a huge mountain to climb.
Know your customer, know their data
Technology plays a critical role in ensuring that the digital experiences customers are getting are as good as they receive in person – and as good as rival FinTechs and the likes of Google, Amazon, Facebook and Apple (GAFA) who have already mastered turning customer data into digital experiences, with offerings including Google Pay, Amazon Protect, Amazon Credit Card and Apple Pay building momentum.2 Customers, familiar with the likes of GAFA but only just beginning to bank online, are asking” Why don’t FSI organizations know who I am?” The answer is because their view of the customer is obscured by legacy technology.
By addressing weak points in your legacy technology and building the necessary infrastructure — whether via partnerships, investments, or upgrades — you’ll be able to deliver enhanced digital customer experiences. You’ll understand how, when, and where target individuals want to transact and consume valuable content.
AI across the board
In recent years, FinTechs have evolved from being threats to allies, as more FSI organizations react by investing in and utilizing their tools, platforms, and capabilities to boost their own digital transformation. Some, on the other hand, choose to go down the digital overhaul route. For example, Dutch banking group ING, which in the summer of 2015 shifted its traditional organization to an “agile” model inspired by companies such as Google, Netflix, and Spotify. 3
No matter what happens next, FSI organizations need to plan a route from where they are now – burdened by expensive real estate and legacy systems – and where they need to be, which is a highly efficient, low-risk blend of digital, and physical channels, or a “phygital” business model. It’s time for the financial services industry to imagine a future where every customer encounter is personalized, relevant, and timely, whatever the touchpoint.
There needs to be a single-strategy approach to personalization that incorporates both traditional and artificial intelligence based (AI) personalization. As AI is utilized to assist marketing operations, it frees up IT resources to support other projects. Whilst FSI organizations are discussing the role of AI, according to our survey 4, just over half are discussing it in small groups or single departments. Meanwhile, 92% have started some conversations about AI’s value to their business but only one third have deepened their commitment by making it a company-wide policy. There is clearly more work to be done.
New rules, new tools
Developments in open banking and regulations is only going to increase the fluidity of financial services and open up new engagement paths for your customers. What’s needed is a platform that enhances the agility of IT teams and is flexible in options (e.g. self-hosting, managed cloud, SaaS) to fit changing business need. Ideally, it will reduce marketing’s reliance on IT for content management and customer experience delivery.
This is where FSI organizations need to be focusing their efforts now — implementing “content anywhere” processes to allow agility across all channels. The rise of the headless CMS demonstrates how brands are looking to streamline content delivery. Headless CMS is built for the IoT era and is perfect for delivering today’s omnichannel digital experiences that your customers crave – and expect!
By updating their legacy technology to incorporate Application Programming Interfaces (APIs), FSI organizations enable developers to build applications and services around your unique requirements, which in turn offers greater financial transparency options for customers and more relationship-building and cross and up-selling opportunities for you, to keep your customers loyal for life. Which is after all, what every organization wants.
1 Seismic shift: How 2020 impacts CX in the Financial and Insurance sector
2 Elsewhen: Why Google, Apple, Facebook and Amazon Are a Danger to the Financial Services Sector
3 ING’s agile transformation
4 Seismic shift: How 2020 impacts CX in the Financial and Insurance sector