Financial Services – The Road Ahead

In his previous posts, guest blogger, Dennis Harhalakis of Gulland Padfield, has looked at some of the issues that beset Financial Services (FS) firms as they wrestle with data, customer experience and legacy technology challenges. For this blog, Dennis looks at some ways that FS firms have used customer needs and lifecycle events to build customer loyalty.

‘Let’s begin with a couple of basic principles. Firstly, when it comes to delighting your customers, start with the ones you have. According to Bain & Co., a 5% increase in customer retention can increase profits by as much as 25%*. While ‘friends and family’ are the most trusted source of recommendations, 66% of consumers trust consumer opinions posted online**. So it makes a lot of sense for those consumer experiences to be positive. A customer with a bad experience is far more likely to create more negative word of mouth (65%) compared to the positive word of mouth that a customer with a good experience will create (25%)***.

Secondly, money is personal and while institutions treat customer interactions as everyday business transactions, money means far more for the customer. Give customers respect and the tools to manage their finances in the way they want, and you create emotional engagement.

In 2017, following up on a user idea posted on its’ community website, Monzo launched Pots. Customers can set up as many pots as they want (within their main Monzo account) and use them to set money aside. Customers can thus pursue multiple savings goals while keeping their day to day spending separate. Money in the pots is not included in the available balance, and cannot be spent except by moving it back to the main account.

In the US, Santander set up a website focusing on relevant lifestyle topics and general financial education to provide customers with content that aligns to the real, in the moment financial challenges they face every day. The microsite was designed to encourage Millennials to master money and includes a variety of content types including blog posts, infographics and listicles on an array of topics including saving, spending and debt management. Prosper & Thrive received more than one million visitors in its first nine months.

Another way to address customer challenges to reaching their financial goals is by intercepting financial missteps before they can occur. Banco de Crédito del Perú analyses customer data to send helpful alerts to customers before they run into financial trouble and so avoid frustrating, costly error resolution later on. For example, if a customer uses a credit card to purchase an airline ticket, the bank contacts them and asks if it should set a travel alert on the account, rather than waiting for the customer to go abroad and have a card declined.

From a customer experience perspective, while there is an understandable focus on the lower costs and high customer advocacy for developing digital channels, FS firms should not forget that they need to make it easier for the customer to do what they want to do, not just what the FS firm wants them to do.’
If you work in Wealth Management and want to learn how you can become a firm that delivers a holistic, digital client experience, contact Ben Revill for an in-depth discussion and discover how Xpedition can help guide your path to growth.

References
* https://xpedition.co.uk/wp-content/uploads/2021/08/BB_Prescription_cutting_costs.pdf
** http://www.nielsen.com/uk/en/insights/reports/2015/global-trust-in-advertising-2015.html
*** The Effortless Experience: Conquering the New Battleground for Customer Loyalty by Matthew Dixon, Nick Toman, Rick DeLisi; ISBN-13: 978-0241003305