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What financial services firms need to know about digital transformation

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 By Winnie Palmer, EMEA Head of Marketing, Seismic

 

The financial services (FS) industry has undergone a tremendous amount of change over the last two decades. Technology has accelerated product and service innovation, yet the spread that traditional lenders and money managers can command has been going down – putting a considerable amount of pressure on revenues.

What’s more, clients are increasingly demanding highly personalised experiences at a similar standard to what they are used to from digital-first firms like Amazon and Netflix, while new channels such as social media are becoming increasingly important.

FS firms have responded to these market shifts with increased investments into digital products and systems, accelerating their digital transformation journey. Ironically, this is causing a new challenge in organisations’ ability to deliver meaningful client experiences as the amount of digital content explodes. It is simply harder than ever for clients to sieve through the vast amount of competing information. That said, clients are indeed looking for content on digital channels of their choice, with two out of three buyers now preferring remote interactions and digital self-service at all stages of the buying cycle. This begs the question how can FS firms ensure that their content will cut through the clutter and resonate with each client’s individual needs?

The good news is that technology continues to offer greater capabilities for FS firms. For example, the ability to analyse patterns, personalise recommendations and disseminate intelligence is greater than ever before. The most successful FS firms are using these technologies to increase their operational efficiency and advisors’ effectiveness to deliver superior client experiences. So, when we consider the future of the FS industry, how must firms adapt as competition increases and client expectations continue to evolve?

 

Building for success

Establishing a culture of continuous learning and development is critical to the long-term success of any digital transformation project. This can help FS firms truly differentiate themselves and their advisors from the competition, enabling their client-facing teams to replicate the organisation’s star players and enhance their level of performance.

Firms should focus on making coaching and training readily available through cwhenever and wherever they are needed. By delivering timely, data-informed recommendations and insights, these platforms can enable financial advisors and money managers to improve their learning speed and knowledge retention. This in-the-moment coaching provides them with the ammo they need to craft and deliver content that truly delights and engages clients.

For example, training programmes delivered through interactive lessons embedded with practice sessions and playbooks that are based on what’s proven to have driven impact in past client scenarios – all tailored to the specific advisor – can help FS teams deliver more engaging and impactful experiences. Leveraging granular performance data, digital platforms can provide insights and recommendations to guide advisers on what to say, do, and show clients at certain stages of the sales cycle. As well as ensuring more effective interactions, this dynamic approach to skill development means advisors can spend more time engaging with clients as they continuously learn and develop.

This is all key to building long-term relationships in today’s FS market. By establishing a culture that focuses on continuous learning powered by intelligent and data-informed training and coaching platforms delivered at the moment of need, FS firms can be confident that their advisors are equipped with the most relevant skills and knowledge – no matter where they are in their career.

 

Driving operational efficiency at scale

Modernising and optimising data processes through automation is another vital cog in the digital transformation machine. The strict regulatory nature of the FS sector means that compliance risks are a key concern. Leveraging technology can enable FS firms to systematically ensure governance and compliance both company-wide and at an individual level – all while reducing costs and increasing their advisors’ productivity.

Centralising these data processes supports FS teams when working with a wide range of assets such as quarterly reports, fact sheets and meeting reviews. Advisors can quickly modify any information based on materials dynamically served from a single source of truth whenever it’s needed without impacting compliance in order to accelerate the approvals process. Integrating these systems across sales, content training and CRM tools will further improve the user experience, ultimately helping financial advisors be more productive and focused on revenue-driving activities.

These technology platforms can also provide key data insights using AI capabilities to help identify behaviours, patterns, and new revenue opportunities from large data sets that would be impossible to analyse manually, thereby driving further impact, faster.

For example, FS firms can leverage these insights to improve the effectiveness of each piece of content they share with clients. Using the data collected from previous interactions, sellers can gain visibility into what has worked, what needs improving, and where clients have engaged with content the most. Armed with these engagement insights from specific scenarios, firms will have a better understanding of the most impactful content, along with when and how it should be delivered. Also, by linking content investment directly to sales performance, organisations can be more intelligent in identifying cost saving opportunities while maximising effectiveness.

 

Superior client experiences

As financial advisors engage more with the younger generation of tech savvy clients, they need to be able to communicate and interact with these clients in the way they desire, delivering more personal experiences and dynamic interactions. In today’s competitive FS marketplace, this is key to meeting the expectations and needs of the modern client.

This is where content engagement data has a vital role to play. Knowledge of exactly how, when and where customers are interacting with pieces of content allows FS professionals to provide a more agile and responsive experience. It lets them tailor each interaction – whether through e-mail, digital sales rooms, social media, or in-person meetings – to the individual.

The key data insights and recommendations that powerful cloud-based platforms provide allow advisors to build meaningful relationships, even in digital and remote environments. Being able to build trust with clients by demonstrating that they understand their unique needs and situation will help advisors engage more effectively and put them ahead of the competition.

Establishing these trusted relationships with younger generations will be invaluable over the years to come as they inherit wealth from their parents and build their own. In what has become a digital marketplace, FS firms must help their teams engage prospective clients with the right content, at the right time, in the right channels – all in a compliant manner. This can only be achieved by tapping into data insights and technologies that enable hyper-personalisation consistently at scale.

This three-pronged approach that focuses on continuous learning, enhanced operations and powerful client experiences must be at the core of any FS firms’ digital transformation strategy. This is what will enable truly holistic transformations, unlocking new revenue generating opportunities and giving firms the tools to succeed in today’s complex and competitive FS environment.

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How FS organisations can utilise data to boost customer experience

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Charles Southwood, Regional VP and GM – Northern Europe and Africa at Denodo

We’ve all heard the age-old adage “the customer is always right”. It insinuates that, in any sector, the needs and desires of those buying a brand’s product or services should be paramount. However, today’s customer has new standards and it is becoming harder than ever for businesses to meet and exceed them.

This is certainly the case in the financial services (FS) sector where getting customer experience right used to be relatively simple. The human touch was traditionally delivered as a bi-product of in-store, transactional interactions. Perhaps, as a result of this, few people ever considered changing their provider and the traditional, established banks ruled the space.

However, with the dawn of online banking and the introduction of new, exciting challenger banks as well as the UK’s unique Current Account Switching Service, the balance of power between the consumer and the bank is changing. Consumers no longer feel locked in. If their needs aren’t being met, they aren’t afraid to look elsewhere and switch their allegiance to other companies. In other words, loyalty is far from guaranteed and customer acquisition is only half the battle.

Retention relies upon delivering strong, unique customer experiences that beat down the competition. In order to achieve this, FS organisations will need to be able to leverage data. Its insights could be the differentiator that enables them to stand out. The positive news is that, in our online world, there is a constant stream of data being produced. However, having access to all this data doesn’t necessarily mean that a brand knows how to effectively analyse and utilise it.

Ensuring data provides insight

The rapid growth in digital technologies and services across the sector has left many FS organisations juggling an unimaginable amount of data. This data is both complex and much of it is lacking in quality. Structured, semi-structured and unstructured, it is stored in many different places – whether that’s in data lakes, on premise or in multi-cloud environments. Before FS organisations can even think about using it to inform customer experience strategies, they need to be able to find it and understand it.

This is where modern technologies – such as data virtualization – can help. Through a single, logical view data virtualization boosts visibility and real-time availability of all data across an organisation.  Unlike traditional extract, transform and load (ETL) solutions, it does not move and copy data. Instead it leaves it in the source systems. In other words, instead of just replicating data, data virtualization reveals an integrated view to those trying to find it.

For FS organisations this provides several important benefits. For example, it helps when data sovereignty issues arise and the movement and replication of data outside certain countries is illegal. Data virtualization solutions can also assist in terms of financial reporting by fetching data in real time from underlying source systems – applying the necessary security and obfuscation whilst delivering the performance, the agility and the accuracy needed through the seamless connection of data.

FS organisations that adopt data virtualization, are likely to see an improvement in the overall performance and efficiencies of their business operations. Overheads will be reduced, as will the length of project times. Above all, data virtualization will rapidly strengthen the customer experience by supporting business leaders to think strategically and make decisions based on real-time insights. But don’t just take my word for it.

The proof is in the pudding: How Landsbankinn is delivering on the CX promise

Landsbankinn is just one of the many financial services institutions that has already successfully embraced data virtualization and its benefits. Despite being the largest financial institution in Iceland – with around 40% of the retail and 33% of the corporate banking market share – Landsbankinn used to face several issues when it came to data sharing and analytics.

Over 45 siloed data sources – including Oracle databases, data warehouses and APIs from internal and external sources – made finding and accessing the right data at the right time extremely difficult. Without real-time data to fuel informed decision making, customer experience and operational efficiency were suffering. As a result, Landsbankinn was in need of a data overhaul to streamline and integrate its infrastructure.

To bring together its complex data landscape and collect data in real-time, Landsbankinn implemented the Denodo Platform – a data integration and data management solution built on data virtualization – to build a logical data warehouse. As a result, the team can now aggregate data from multiple data sources, transform that data based on the applied business rules, and then make it available to consuming applications. Ultimately, this means that, throughout the organisation, the data can be utilised by a wealth of employees, even those who are not particularly IT savvy. It also means that the business leaders can use data insights to make well-versed decisions and provide a plethora of services to Landsbankinn customers both quickly and efficiently.

In recent years, customer retention has become the key to successfully growing a business. This cannot happen without an effective customer experience strategy. The ability to convert data into insight is priceless in an economic landscape where the line between a business thriving, surviving and failing is so thin. Those operating in financial services must harness modern technologies – like data virtualization – to stay at the top of their game and ahead of the competition.

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The Evolution of SoftPoS in 2023

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By Brad Hyett, CEO of phos

Contactless payments and digital wallets have surged in popularity in recent years. Part of this stems from the digital boom that occurred during COVID-19 but it’s also thanks to the ease of use that contactless offers customers. This has helped accelerate Software Point of Sale or ‘SoftPoS’ adoption amongst SMEs and enterprise retailers, with a total of 6 million merchants taking advantage of the technology in 2022 according to Juniper Research.

SoftPoS or ‘Tap to Pay’ technology – is a software solution that allows vendors to turn their phones or mobile devices into contactless payment points. This has made life for small businesses easier, as they no longer have to fork out large sums of money for traditional Point of Sale (POS) terminals, i.e. card readers, or ‘make do’ with outdated payment software.

In light of Apple’s announcement to allow third-party SoftPoS providers to deploy their technology on iPhone last year, adoption is expected to increase further. By 2027, it’s forecast that there will be up to 34.5 million merchants by 2027 – nearly a 500% increase from today. With more payment giants like Paypal and Venmo announcing they will support contactless transactions through their iOS apps in the months ahead, what else is in store for SoftPoS in 2023?

Apple’s role in market consolidation within SoftPoS

Apple’s move to integrate the technology with iOS devices will expand SoftPoS’ usability across mobile operating systems – significantly boosting the size of the addressable market for vendors. For the first time, Apple users will be able to offer Tap-to-Pay solutions which have traditionally been limited to Android devices only.

This will ultimately bring greater awareness and adoption of SoftPoS as we see increased familiarity with Tap-to-Pay solutions among businesses and consumers alike – as they’re no longer bound by the constraints of the type of phone they use.

While the SoftPoS on iPhone rollout currently only applies to the US market, it’s fair to assume this will expand internationally at some point – aiding the normalisation of ‘Tap to Pay’ solutions en masse in the months and years ahead.

The next wave of solopreneurs

The events of the last year will also continue to have a ripple effect over the next 12 months. For example, we’ve seen the tech industry undergo mass layoffs due to a challenging economic environment and rising global inflation.

With large numbers of highly skilled talent out of work, the phenomenon of solo entrepreneurship is likely to see an uplift – as it did during the pandemic – over the next 12 months. Born in a digital-native environment, individuals from this released workforce can now set up their own businesses and run them on mobile devices, as opposed to legacy infrastructures.

This could prove another sizable opportunity for SoftPoS vendors in the coming year, as we predict to see more small businesses sprout as a result of ongoing redundancies.

The growing importance of SoftPoS orchestration

As the market rapidly develops, so too does the choice and ease of onboarding. Financial institutions and retail technology providers can now use a SoftPoS orchestrator to help them deploy Tap-to-Pay solutions quickly and easily for their merchant customers, instead of having to create their own mobile solutions. This saves them time and money – both crucial resources for any business and especially in a challenging economy.

Partnering with a SoftPoS orchestrator is a cost-effective way of providing mobile payment solutions without having to worry about waiting on new software and security updates. With an orchestrator, this is done automatically – making this a much lighter lift with no requirement for technological know-how.

As SoftPos orchestrators are acquirer agnostic, this means they can help businesses provide a SoftPos solution to their own retail customers, regardless of the existing acquirer that they’re already using.

An additional benefit here is that a wider pool of merchants are able to benefit from the technology – growing the overall size of the SoftPoS market. Orchestrators, then, have the ability to drive wider adoption of the technology globally, reaching a bigger audience of end users and advancing the mobile payments industry in emerging markets across the world.

Conclusion

The increased popularity of digital and contactless payment options has driven exponential growth in the SoftPoS market in recent years. The next 12 months will see the technology enter the mainstream, as Apple starts to allow more third-party SoftPoS providers to deploy their solutions on iPhones.

The timing coincides with several emerging opportunities for the technology, including a potential uptick in the number of solopreneurs and mobile-first businesses. This combination of factors will see more financial institutions and legacy technology players work with SoftPoS orchestrators to bring Tap-to-Pay solutions to market in 2023 if they want to stay ahead of the competition and keep up with ever evolving customer demands.

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