In our last blog on ‘The Future of Financial Services’, Dennis Harhalakis looked at the key factors impacting technology and the customer experience in FS. These included the likes of personalisation, big data and user-generated Content (UGC). Now, in Part 2, Dennis looks at the ways FS firms can incorporate these factors into their own business models.
So, what does the future of financial services mean for firms who wish to incorporate the likes of big data, user generated content (UGC), personalisation and other key technology and customer experience advancements into their business models? By using emotional engagement and data analytics to understand, anticipate and react to customer needs.
Done correctly, this will reposition FS firms from product pushers to institutions that aim to build long term financial partnerships based on customer needs and lifecycle events. Here are 3 broad areas for consideration:
Create emotional engagement. Simplifying complexity and help customers achieve personal values such as social acceptance or attaining independence. Behavioural research has shown that people shy away from things that appear complex, difficult to understand or may leave them feeling inadequate (emotional/physical pain). As with avoiding the dentist, people know they should do financial planning but don’t. Helping them with simple online guides, podcasts or videos creates a connection and builds subconscious loyalty. It also allows you to track what they are interested in.
Build an ecosystem where customers can share ideas and feedback. The financial product sales and education process is now increasingly online and customers use a combination of news feeds, finance sites, blogs and social networks to help them make decisions. Understanding what your customers are thinking is the cornerstone of any successful Customer Experience programme and it’s now possible to do it without having to ask them directly. Combining educational material, feedback and other UGC, will prove invaluable in being part of customers’ learning processes, understanding their needs, and then helping them with their financial journeys.
Give customers the tools to manage their finances in the way they want. Most of us have multiple expenditure and savings goals but we often have to combine them in one pot or open different accounts. The ability to set up rules to transfer salary proceeds into various sub-accounts (rent, food, utilities, rainy day, holiday, etc.) supports budgeting and creates empowerment. By using tools that analyse transaction patterns, firms can then anticipate customer needs and offer solutions – for example, warning them before they incur charges or offering pre-approved loan limits if they are likely to go overdrawn.
Nearly all of the developments above have been driven by technological advances. Technology has changed the way products and services are delivered as well as the nature of the relationship between producers and consumers. The future of financial services means firms need to use technology to engage with their customers and position themselves as long term financial partners.