In a previous blog, Appian revealed the importance of FinTech partnerships. However, financial institutions also need to be aware of the competitive threat posed by digital leaders, such as 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:
Technology innovators have proven that personalization is a key aspect of the customer experience. Future financial leadership will belong to institutions who are willing to learn from technology innovators, and use fact-based market insights 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 traditional data points like age, income, length of relationship, balances, etc. It will include purchase behavior, social interactions, and key life events. Access to this varied data, coupled with the ability to easily integrate it across systems, will give financial institutions the power to know their customers on a more personalized level. With this type of knowledge, financial institutions can target specialized offers to their customers. 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 what’s possible with traditional asset managers. Without personalization, financial institutions run the risk of becoming a commodity.
Before your company is capable of capturing in-depth insights, you must be able to establish trust with your clients. Technology giants like Amazon have built trusted relationships with their customers by offering 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 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 and deliver exceptional customer experiences. Successful financial service providers deliver differentiated products and services to suit varying customer needs. They increase trust by emphasizing transparency and client data security.
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 throughout buyer’s 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. A broadened ecosystem will then enable the financial institution to remain relevant, provide greater insights and better service.
An important takeaway from the success of 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 to adapt to changing customer needs and behaviors. This demands a willingness to evolve quickly and often. It may require new approaches like gamification, or 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.
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