By James Hall, Commercial Director, Doxim
Traditional financial service organisations may be multi-billion pound companies today, but their future survival depends on their ability to face down a multitude of threats. The past two years, for example, have shown just how deeply unexpected global events can impact them. As an illustration of this, three major UK banks shut down thousands of physical branches in 2020 and 2021. While some of these changes were due to the ongoing shift to digital, cost-cutting measures also played a significant role.
While world-changing threats are difficult to predict, there is an ongoing threat faced by financial services companies that can be proactively addressed. Over the past few years, we’ve witnessed an explosion of disruptive fintech startups, many of which are coming for traditional financial service companies’ lunches. They’re increasingly well-backed too. In fact, research from KPMG shows that UK fintech investments hit US$37.3-billion in 2021, seven times as much as it received in 2020.
But traditional financial services aren’t powerless in the face of this onslaught. That’s especially true when you remember that it’s not revolutionary technologies or processes (which are easily replicated) that make these fintechs so attractive, but the experience they provide customers. By utilising technology platforms to centralise data and communications, even the largest, most traditional, financial service organisations can offer similarly high levels of customer experience.
What your customer wants
When it comes to providing those experiences, the first thing financial services companies need to bear in mind is that money is an intensely personal thing for everyone. Whether it’s buying a home, investing in a child’s education, organising the holiday of a lifetime, or planning for retirement, money plays a central role in so many of the most important parts of our lives. And in order to unlock (or grow) that money, most people have to go through a financial services organisation of some kind, whether that’s a bank, building society, investment house, or a specialist lender.
It’s therefore pivotal that these organisations not only demonstrate that they can provide the necessary services, but also that they understand what each customer needs at an individual level. Critically, they need to do so in every engagement, particularly their loyal, existing customers.
In so many other parts of their lives, people receive hyper-personalised, hyper-relevant experiences. They increasingly expect their financial service to provide similar experiences. And if they don’t, they’ll leave and find one that does.
Combining data and platforms
Fortunately, financial service providers have a super power on this front in the shape of data. As IT services company Capgemini points out, “while digital technologies are critical, data remains banks’ most significant asset”. The same is true of other financial service providers.
When that data is utilised correctly, it can result in the kind of highly individualised experiences that customers thrive on. But in order to do so, it has to be organised and filtered in such a way as to give the organisation a single view of the customer. After all, customers experience many different phases of interaction with a company and each of those touchpoints has the ability to impress the customer and by doing so, contribute to a positive customer experience.
Platforms can go a long way to both ensuring that every department within an organisation not only has that overarching single view, but is able to meaningfully act on it. Let’s take customer communication as an example.
Using a customer communication management (CCM) platform, organisations can send messages to customers that are no longer generic, but tailored according to customers’ needs and specific channels (web, email, text, print) and devices (mobile, laptop, tablet, PC).
They also mean that messages received by a customer cover not only the needed information but the entire context of the interaction which includes customer profile (e.g. lifestyle and life-stage needs), history of online activity, and personal preferences. While those are important for all organisations, they’re particularly important for financial service providers, where certainty is critical to building trust among customers.
They can also help financial service providers achieve a great digital experience by creating, sending, and storing customised messages and providing consistency across all the channels that customers interact through. In addition, it enables the organisation to leverage the data on hand to generate highly personalised offers that are relevant to each customer’s needs and lifecycle stage. A good one will also cater to each customer’s accessibility needs.
The imperative for adaptation
Over the past two years most organisations, including those in the financial services space, have rapidly accelerated their digital transformation efforts. As they consolidate on that transformation, it’s critical that they not adopt technology for technology’s sake. Instead, they should focus on adopting the kind of technology platforms that provide consistently good customer experiences. In doing so, they give themselves the best possible chance of dismantling the threat of upstart fintechs.