Global investment in fintech startups is skyrocketing, reflecting a worrying trend for established financial services firms.

Customers are increasingly flocking to a new generation of companies that seek to redefine how consumers save and spend money. 

From payments to loans to insurance, established brands are under assault from all directions, but that doesn't mean they can't stem the tide, solidify customer relationships and increase customer lifetime value.

Here are five ways they can do just that...

Pay attention to customer experience

It's hard to increase customer lifetime value if you can't retain your customers. On this front, poor customer experience has plagued many financial services brands.

From mobile banking apps that suck to appalling customer service, many financial services firms are guilty of giving customers reason to take their business elsewhere. Before financial services firms can increase customer lifetime value, they have to keep it from eroding.

Stay competitive 

Far too many financial services firms have been operating under the mistaken assumption that their customers will turn to them first when they have a need. But that is often not the case today.

When it comes to buying a home for instance, many consumers don't head down to their local bank for a mortgage.

In an unbundled market where consumers are very comfortable using different providers to meet their financial services needs, financial institutions need to recognize that competition is virtually everywhere and have a deep understanding of what the competition is offering so that they can ensure their offerings are compelling.

Partner where appropriate

Due to issues like regulation, few financial services firms can be all things to all customers and in some segments of the market, large financial services firms simply can't be competitive. But that doesn't mean they should leave their customers to their own devices. 

Forward-thinking financial services brands can establish themselves as trusted advisors to their customers by forging partnerships with other companies capable of delivering high quality products and services they don't offer or can't offer competitively.

Not only can these partnerships generate revenue, they can help financial services brands maintain broad relationships with their customers.

Embrace and use data

Collecting and using data can be one of the best ways for financial services firms to understand their customers and identify their needs.

Data-driven personalization is particularly important to large financial institutions, which often have a dizzying array of products and services that customers will never know about unless informed.

Predictive analytics can help institutions inform customers of the right products and services at the most opportune times.

For example, financial institutions can monitor balances and transaction activity to suggest products and services, like loans and insurance, when they're most likely to be needed.

Provide data back to customers

Data is for sharing. The popularity of personal finance services like Mint, which was acquired by Intuit in 2009, demonstrates that just as millions of consumers enjoy tracking their activities using fitness trackers, millions of consumers find value in tracking their personal finances. 

To keep customers engaged and in their fold, financial services brands should look for opportunities to take the data they collect and provide some of it back to their customers in innovative, meaningful ways.

For more insight, download our report: Digital Trends in the Financial Services and Insurance Sector.

Patricio Robles

Published 18 May, 2015 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)


Rhea Cairns, Senior Account Manager at Neo PR

It is great to see customer experience as a high priority within this article. However, one of the main challenges in the financial services sector is that companies have limited opportunities to create and build relationships that lead to a positive customer experience online. To combat this, companies must urge their audience to engage with them further and create accounts that can act as the central point of the online relationship.

A crucial element of this will also be focused around optimisation, and agreeably personalisation. Building strong customer relationships will not only continue to improve the online experience but also yield dividends by utilising both the investment the customer has made in a brand and the personalised experience that brand is able to offer, driving both retention and cross-selling.

Nick Fleetwood, Head of Financial Services, EMEA, Maxymiser

over 3 years ago

Brian Boys

Brian Boys, Content Specialist at Brian Boys

Great points, Patricio. Probably the biggest competition for big investment firms and independent advisers alike are the new automated online investing services--the so-called robo-advisers. They beat everybody on fee structure and they're really easy to use.

Of course, it's easy to have happy clients when the market keeps climbing. But when the big correction comes, will customers run to more traditional advisers who can help them mitigate their losses?

Having a relationship with real person you can trust will mean a lot more.

over 3 years ago

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