It’s no exaggeration that over the past two years, the Australian and New Zealand financial services industries have witnessed a once-in-a-generation set of circumstances. The pandemic brought with it a necessity for innovation that we couldn’t have predicted.
While the pandemic kickstarted the engine of innovation, the changing customer mindset has kept it going — and it will continue to turn long after the world fully reopens.
The past couple of years have created a perfect storm of regulatory, economic and health changes that have transformed customer expectations. This has seen the financial services industry enter a state of hyper-adaptation.
Market swings and rapidly changing customer expectations have led to the creation of a range of new technologies, which in turn have led to new distribution models, products, offerings and players. These new players, such as open banking organisations, are innovating in astounding ways and hitting the customer sweet spot in a fashion we haven’t seen before.
At the same time, longstanding institutions are racing to integrate of-the-minute innovations into established operations. While such rapid evolutions are difficult, many institutions are rising to the challenge, partnering with new players, making smart hires and implementing new technologies. In other words, they are realising that the only way forward is through the cultivation of a new mindset.
The co-existence of and interplay between new and established players has created an exciting, fertile environment for positive change. Advancing along this new course isn’t easy, and requires inventive thinking on multiple fronts — but I’m confident that the industry as a whole is heading in the right direction.
While getting one’s head around the multiple changes to the financial services industry requires time and dedication, it takes no stretch of the imagination to pinpoint the most significant progression, one that almost all others stem from: the rise of customer-centricity.
As 2021 heads towards the finish line, it’s clear that the customer is well and truly setting the pace. It’s no longer a matter of spraying products and offerings and praying that customers jump on board. The cues are no longer coming from within institutions, but from the wants and needs of customers.
For some, this has been a disorienting new normal. For many others, this has been a logical and even welcome development. Placing customer desires in the middle and making decisions from that position offers a new kind of clarity and focus. Business operations, then, become an intimate, ongoing conversation with the customer — and those institutions that excel at listening are far more likely to succeed and grow.
Recently, Salesforce engaged Bain & Company to conduct research for its new report: The Customer Imperative in Financial Services. The report was loaded with relevant insights on both how customers feel about what they’re currently getting and what they want in the future.
In a somewhat surprising revelation, 30% of traditional bank (and 20% of digital/direct bank) customers said that they were happy with their chosen institution’s behaviours during the pandemic. These behaviours harnessed digital convenience and included flexibility on loan repayments, proactivity in communications and enhanced credit options. As a result, these customers were more likely to recommend their bank or insurer to others. We’ve rarely seen such a spike in advocacy, and it demonstrates that stepping into the customer’s shoes goes a long way in retaining business and facilitating future growth.
The report also reveals areas that require further focus. Almost half (45%) of all customers welcome their bank being more proactive in recommending relevant products and services. This is basically an invitation for us to get to know the individual customer as much as we can, which I’ll get into later.
Another pertinent stat is that 40% of customers are taking up new banking products and services from providers other than their primary bank. This is encouraging for some institutions and sobering for others. Either way, it’s clear the industry climate is only growing more competitive.
Gone are the days where online processes are a mere adjunct to a face-to-face core. Now, customers want to be able to complete all in-branch actions in the digital space. Not only that, they expect those actions to be accessible across multiple channels, while at the same time actionable end-to-end on the channel of their choice.
In other words, the pot of gold is now excellent digital-first, omnichannel customer experiences.
However, in 20-30% of situations, consumers are still unable to complete what they set out to do in their channel of choice. These broken processes are no longer acceptable and they have a direct impact on customer advocacy.
And even when end-to-end processes are made seamless within individual (and across multiple) channels, institutions must never forget the importance of human interaction. While the digital experience is vital, customers don’t want to feel stranded in an online space; they want the option to connect with an informed representative at any point throughout their journey.
An excellent digital-first experience in today’s age is not only about convenience and ease, it’s also about intimacy. Customers are now expecting their providers of choice to know them on a granular level. The more a financial services institution is able to know about a customer — their past interactions, present situations and future needs — the less friction is created and the more satisfaction is cultivated.
A confluence of factors enables such personalisation, first and foremost being the availability of data. And not data in and of itself, but how that data is managed, integrated and shared throughout an organisation. By leveraging marketing ecosystems such as Salesforce, you are able to bring together data from multiple touchpoints to gain a 360-degree view of the individual.
The data in that view is expressed as actionable insights that foster an ever-deepening relationship with the customer. This means that both automated channels and human representatives can be furnished with the latest data on a customer, and act on that data in real-time.
Let’s look at an example of such a personalised journey. Say, the data shows that a customer has spent considerable time and money online shopping. They are then sent email communications on a new debit/credit card that would benefit them on future purchases. After reading up and expressing interest in said card, the customer enters live chat for further clarification, and is met by a representative that already knows about their penchant for online shopping, their recent product offerings and their interest in the new card, and can then guide them further towards a meaningful decision.
In other words: a seamless, frictionless and intimate omnichannel customer experience.
As an industry, we are in a prime position to build on considerable momentum to ensure further positive change. The task now is to settle into the customer-centric environment and remain curious – looking out for where processes and mindsets are outdated as much as for opportunities for adaptation and growth.
The good news is, both new and established players are moving forward with this spirit of curiosity and making equally bold and intelligent choices to deliver products, services and experiences that the modern customer wants, needs and expects.
Want more insights on how to thrive in the customer-centric future of financial services? Get your copy of the Customer Imperative in Financial Services report now.