Abi Acland, Business Consultant, Strategy & Analytics at Acxiom
Over the past decade, there has been widespread change when it comes to how people access financial services and how these services are delivered. In most cases, today’s banking experience does not take place at a physical branch but at the fingertips of customers on their mobile devices. This is all against a backdrop of evolving customer needs, due to the rate that technology is changing, and the way businesses operate. Customers expect their journeys, both online and offline, to be seamless, and this is where financial services providers must think about how they can build trust at every touchpoint and interaction.
In fact, according to a survey this year by PwC, sentiment in the financial services sector fell by the fastest rate since September 2019 (42%). At the same time, UK households are facing increasing financial pressures due to the cost-of-living crisis. This means the stakes are higher when it comes to customers deciding where they are going to spend their money, and financial services providers have an opportunity to make sure they are building trust and brand loyalty during these challenging times.
What good customer experiences meant in the ‘old’ pre-Internet world, and what has changed
Good customer experience is about building relationships with customers, and while physical interactions have decreased, data now offers the opportunity to build lasting relationships in a different way.
The market leaders in every sector are those that have got sophisticated in how they’re using data. It’s integrated into their product development and management, customer service, and retention. Overall, there’s not only the culture, but the tools in place to make decisions based on data. It’s how they’re able to speed up their time to market, get closer to their customers, improve efficiencies in their marketing, and build loyalty.
When it comes to the financial services sector, organisations know they need to be gathering data, but it can be unclear what kind. It’s not possible to collect personal data ‘just in case’, because it might one day come in useful. There must be a clearly defined use case, otherwise it needs to be deleted to stay compliant with data protection regulation. Not to mention the fact that personal data has a defined shelf life, and must be regularly updated if it’s to be valuable in any way.
Building a successful data strategy involves a degree of scenario planning – assessing what the data needs of the business are in the immediate, medium and long term – and from there, putting the right structures and processes in place to collect and manage the data they’ll need. This is not something that can happen overnight, and trying to do all this while operating the usual business functions adds to the complexity. But for those that can get it right, there are huge gains to be made.
How brands can build trust in a multi-channel digital world
But successful data strategies aren’t possible without consent and buy-in from consumers. In the ‘new’ digital age of financial services, providers need to build loyalty with customers by becoming their ‘trusted custodians’ of data – and this means having a clear understanding of the roles identity and security play in offering a good customer experience.
Providers need to be transparent with customers around their preferences for data collection and use. While regulations such as GDPR make this necessary from a legal standpoint, organisations should regularly be communicating with customers about their data, irrespective of this, and purely through a lens of building loyalty and trust. For example, they can open up conversations about what the cookie changes mean for them, the differences between first and third-party data, and how their information is stored.
In a similar vein, organisations need to continue making cybersecurity a priority, so customers understand that their data is being kept safe. By creating an open dialogue with customers, businesses can continue to build on the trust piece and make sure customers feel valued and engaged in a conversation about data protection.
Personalisation will always be key
Personalisation is key to building trust with customers in a digital world. The goal has moved from personalising face-to face-interactions, to tailoring every digital transaction – and at scale. Whilst most financial services providers will have personalisation as their goal and have been on this path for years, there are barriers to executing fully personalised strategies due to data siloes, an explosion of new digital data sources, or perhaps a lack of confidence in the quality or depth of data. Ironically, customers expect their banks to know them better than almost any brand – and yet banks often hardly acknowledge the relationship, let alone speak to their customers as if they understand the full scope of their relationship.
The sector needs to consider how they are engaging with customers across generations and establishing loyalty with them now. While the industry has generally tended to target those aged 30+, they need to do more to interact with young people. The next generation of spenders are coming up the ranks and they have little awareness of how they will deal with their finances, especially against uncertainties such as inflation and the cost-of-living crisis. The sector needs to think about how they personalise the journey for newer customers, to ensure they are future-proofing operations for upcoming generations.
The end goal: understanding customers better
So how can financial services organisations truly get to know their customers, and build trust using the right marketing technologies? Most commonly the tools used to execute decisioning are a combination of real-time data stores housing extensive databases, and customer data platforms (CDPs).
CDPs are a key way for providers to improve interactions with customers and to understand their financial needs better. They can be used to combine data streams from multiple sources, which target customers based on their behaviours and use predictive analytics to model future behaviours. This means customers can be reached in the right way at the moments that matter to them – all working towards building lasting loyalty, symbiotic dependence, and most importantly, trust.
Ultimately, choosing the right message for the individual and activating that message is crucial in the new age of financial services. Customers want to use products and services that are tailored to their individual needs. Financial services providers should consciously think about how they can understand the data they obtain from customer interactions and how that shapes the end delivery of their products and services.
With the use of the right technologies, building trust in the new world of FS will become easier and more successful for organisations, where data is the common thread that builds trust with customers.
