In a recent blog, we discussed the importance of FinTech partnerships. In today's blog, we'll take traditional financial institutions to school on the competitive threat posed by digital leaders like Google, Alibaba, Facebook and Amazon.
Research shows that an astonishing 78% of global consumers would consider purchasing banking services from a non-bank provider such as Amazon or Google (Accenture).
Here are four things you can do to get ahead of big-tech disruption and stay there:
Personalize Service
Technology innovators have proven that personalization is a key aspect of the customer experience. Future financial leadership may belong to financial institutions who are willing to learn from these technology innovators and use fact-based market insight to create one-to-one relationships with their customers. This type of personalized, relevant customer experience requires data that can be leveraged for actionable insights beyond the traditional data points of age, income, length of relationship, balances, etc. to include purchase behavior, social interactions, and key life events. Access to this varied data, coupled with the ability to easily integrate it across systems, gives financial institutions the power to know their customers on a more personalized level. With this type of knowledge of customers, financial institutions are empowered to target offers. For instance, more educated, affluent customers may be looking to their banks to make them financially successful and meet all their life goals. High net worth investors could expect similar personalized service for investment needs, like Exchange-Traded Funds (ETF's). ETFs are algorithms fed by data and are an example of where access to data provides an opportunity to provide unique value, beyond that possible from traditional asset managers. Without personalization, financial institutions run the risk of becoming a commodity.
Establish Trust
Underlying the ability to capture in-depth insights is the prerequisite of establishing trust. Technology giants like Amazon have built relationships of trust based on consistent, secure experiences and a dedication to detail. Research suggests that although trust in financial services has increased steadily over the last five years, in 2018, the rise has stalled. Trust is built over time and requires constant, continuous and transparent interaction. The bar has been raised regarding trust in financial services, it takes a long time to establish and can be broken in an instant. Therefore, financial institutions must be responsible and take more precaution than ever to protect personal data. This combination of higher expectations and decreased trust provides a great opportunity for forward-thinking financial institutions to crack the code around delivering exceptional customer experiences. Successful financial service providers deliver differentiated products and services to suit varying customer needs and increase trust by emphasizing transparency and client data security.
Be Consistent
To consistently deliver an engaged experience, financial institutions require an enterprise-wide view of each customer by integrating customer data across business and product lines along the complete buyer journey. This will enable banks to build enhanced profiles, understand preferences, and predict major life events that demand financial advice, solutions, or services. According to Accenture, 79% of banking, insurance, and fintech CEOs believe customer expectations are shaped by hyper-relevant, real-time, and dynamic experiences. To meet customer expectations for consistent, relevant experiences, financial institutions need to place customers' unique needs at the forefront of the experience by delivering easy-to-use financial solutions across all touchpoints. To achieve this, financial institutions will need to reach outside of their own organization through things like API integration that extends the service providing ecosystem. This idea of the ecosystem getting broader enables the financial institution to remain relevant and provide greater insights and service.
Engage Customers
An important lesson we can learn from Amazon and other technology giants is that your best customers may be the ones you already have, and the key to customer retention is engagement. Keeping customers engaged during a time of increased competitive pressure and a constantly changing regulatory landscape is challenging for financial institutions. Successful engagement requires intuitive applications, self-service capabilities, and automated assistance for increasingly sophisticated services. To measure and understand the success of customer engagement, financial institutions must be willing to evolve quickly and often to adapt to changing customer needs and behaviors. This may require trying new things like gamification and cultivating an active presence on social media to engage with the next generation of customers. It is both an incremental and a transformational change for financial institutions.
Save the date
Traveling to Sydney? We'll see you at Sibos at the International Convention Centre (ICC) from October 22-25. Please schedule a meeting with our financial services executives, visit our booth (K-10), and don't miss our presentation with Barclays' Haider Hayat, VP, Data Propositions on Wednesday, 24 October at 12:15 in open theatre #2 on level four of the convention centre.
Visit our Appian financial services resource center to learn more about our low-code digital platform.
