In collaboration with Sitecore, Econsultancy has launched an updated report called Financial Service Focus: Can companies respond to customers’ new-level expectations in the digital age? – exploring challenges and opportunities facing firms operating in the field. Based on a poll of 201 senior executives from the financial sector and 155 respondents from different industries The report contains the most important highlights.
Table of Contents
Legacy providers know the challenges that lie ahead
It’s no surprise that the year that has just passed was an era of massive change in the financial services industry in many different areas.
Retail banking is now at the forefront, providing customer service since the COVID-19 pandemic has a negative impact on the financial sector and mobility of customers. The insurance industry, which is in the process of transforming itself digitally, faces an ever-growing market and increasing pressure to cut costs. Wealth management clients continue to search for improved accessibility to digital services as their demand for self-service expands.
Finance and insurance (FSI) executives understand the need to meet ever-changing customer expectations , with 40% of respondents saying this was one of the top changes taking place in the present and requiring actions. The increased expectations are likely caused by the swift change from traditional in-person experiences to digital, considered to be a major shift for the majority of respondents.
Delivering next-level digital experiences
The return of in-branch interaction presents the next problem for FSI companies to manage a hybrid offline and online experience for a greater number and a wider range of customers.
At the moment, at the very least, there’s an increased concentration on digital channels. The top three channels FSI executives intend to promote the most over the coming years are social media, and websites (both with 24 percent) and mobile apps (20 percent). In contrast just 12 percent of the executives intend to promote their channels in person.
Centralization is the key to ensuring seamless customer journeys
Experiences that meet the needs of customers in a wider sense and provide innovative solutions to seemingly insurmountable problems, and are seamless throughout all platforms are the most important factor in standing out in an increasingly crowded world of brands. This means that you must be in a position to identify specific customers when they connect to the various providers through an ever-growing array of channels.
A central approach to managing customer journeys is the only way to provide real-time personalization on a large scale.
But, FSI organizations still lag when compared with other industries. FSI companies have a lower likelihood to say that their company manages experience from beginning to end and in a manner which will be “centralized, with designated owners to manage key stages, actively” (FSI 38%, compared to Other Industries 52 percent).
To stand out and compete more easily in a competitive and changing market, traditional enterprises must fundamentally change their technology and organizational structure.
Technology plays a greater influence on changing the world.
The industry of financial services is known for having a lot of IT-focused players. HSBC for instance has more than 20,000 employees within the IT division, which is greater than the most well-known technology companies. In addition it has made major investments totaling $2.3 billion in AI and digital technology.
Although FSI firms may have taken on technology in a way that has transformed the user experience on the front end Our survey suggests that integration in the backend might be a bigger issue. In particular, when compared against other industry sectors FSI executive managers are more likely not to say that their organizations have the latest technology that is fully integrated with CRM and other ecommerce platforms (28 percent versus 40 percent).
With the expansion of cloud computing and SaaS optimization to meet an organization’s specific set of functional capabilities as well as CX delivery expectations is an issue. In certain instances trying to build a complete tech stack may create a fragmented array of technology that is difficult to manage and do not have the ability to adapt to evolving business requirements.
Optimize customer data in order to get over important obstacles
Due to the difficulties in FSI in the area of back-end integration and rules, it’s no surprise the fact that just 31% of firms have centralized customer information that can be used for offline and all-digital interactions. In this situation, companies will be more likely to have to contend with data silos that stand blocking an all-in-one source of truth for customer profiles.
Inefficient marketing workflows can hinder the ability of an organization to make the most of the value of customer information. Sharing information across the appropriate teams in real-time could reduce inefficiencies. However, decentralized data management across silos stops companies from providing the best communication that connects the digital and physical components.
Yet, consumers are likely to remain awed by the quality of service. This has been put in focus for insurance companies in the aftermath of the pandemic. Lifestyle changes for customers and habits, including the drastic reduction in mileage driven during lockdowns, exposed the inflexibility of insurance premiums that are traditional. As a result, many insurers like Geico, USAA, and Farmers offer a reduced premium for a limited time. Effective management of customer data can therefore assist in anticipating these shifts , and also to take action regarding changing conditions.
Move towards next-level experiences
Technology doesn’t only centralize data about customers It also analyzes and enhances data to be a reliable factor in gaining competitive advantages. However, linking data across multiple platforms offline and online is a problem all over the world.
Utilizing the machine-learning (ML) as well as artificial intelligence (AI) to bridge the gap and effectively target customers would dramatically shift companies toward a deeper digital transformation.
Our study shows that just 31% of respondents believe that the experience on the internet is continuously and automatically customized to the individual customer by making use of Machine Learning. Yet, another 38% claim they are using personalization algorithms or persona-based algorithms, and testing using machine learning to improve segmentation and target.
A greater number of people are involved in this especially with regard to algorithmic and persona-based targeting, which can assist FSI companies make a huge advancement in the digital experience maturity.
Understanding the path to take
When asked what their main business goals were, the respondents most frequently responded “better leveraging technology to accelerate our business success” (28 percent). There is a desire maybe motivated by necessity all across the enterprise to dig deeper into technologies that can deliver top-quality digital experiences.
The findings in this report also serve as an indication that, despite the skewed customer understanding and the lack of centralization, FSI firms do not have a lack of information or technology solutions by themselves. Instead, they must solve the issue of lack of connectivity between their systems and silos in order to adapt to ever-changing customer behavior and demands.
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