Financial services and insurance (FSI) is in a state of flux, concerned with digital threats; new economy competitors and how to appeal to younger consumers with traditional products.
To keep pace, Econsultancy has launched several pieces of research, including two studies in partnership with Adobe. Today we’re launching Digital Transformation in Financial Services, a look at how the industry is changing, based on a survey of over 400 executives in financial services sectors.
Where appropriate, the study’s findings are broken down by subsector and success in digital transformation, comparing marketing leaders with the mainstream to identify current tensions and future trends.
FSI leaders are competing for the future
If you are a digital leader, your organization is looking ahead, and sees competition coming from newer players. That’s driving priorities in growing the client base today and providing a consistent, high-quality customer experience to support growth.
For the mainstream, however, the immediate path to growth is through current customers, reaping easier rewards while trying to address digital shortfalls.
This difference between forward thinking companies and their peers underlies many of the study’s findings; leaders are already focused on the future, while the mainstream is mired in legacy thinking and technology.
Accordingly, there’s a marked difference in how digital leaders and mainstream companies in FSI see their greatest competitive threats over the next two years; leaders are much more likely to be conscious of competition from the new economy giants such as Google, Microsoft, Apple and startups providing seamless, quick, and cheap services.
Almost half of digital leaders (49%) say that competition from the new economy is their greatest competition, compared to 29% of mainstream respondents.
Digital’s impact on sales is increasing rapidly
In planning, the lines between digital and offline marketing are fading, but they’re still distinct in most budgets. The vast majority of digital budgets are expected to rise in 2017, and their growth continues in the double digits. The average increase cited is 15% by mainstream companies and nearly double that rate (27%) by leaders.
Digital’s impact on sales is also on the rise, both direct and influencing, with roughly one-third of sales today ascribed to digital channels.
Leaders see data as the key to winning with experience
The ability to manage customer data for first party advertising, partner marketing and customer experience management will be an important lever for growth in coming years, and leaders are better positioned to pull it.
Half of leading companies have deployed a data management platform, nearly 60% more than the mainstream. Looking ahead, a quarter of leaders who haven’t already done so have targeted DMPs as a priority area for 2017, compared to only 14% of the mainstream.
Personalized experiences are a goal across sectors and companies, but barriers vary. Mainstream companies are still most likely to run up against IT and security concerns. Leading companies aren’t immune to these, but are just as likely to be focusing on structure and political issues, citing channel ownership as a key challenge.
The cloud has arrived, with AI on the horizon
Leaders are significantly outpacing their peers in implementing cloud solutions; they are 44% more likely to be using cloud marketing platforms and 40% more likely to have moved internal systems and operations to the cloud. Most striking, they are 89% more likely to have moved product backend systems there, allowing a more flexible approach to a rapidly evolving customer experience.
More than half of FSI leaders say that they’ve implemented artificial intelligence in some customer-facing areas. Among the subsectors, retail banking leads, with over one-third of respondents having an active AI initiative, and 45% describing it as a high priority in 2017. Insurance and investment lag significantly; more than half of these companies say that it’s not a near-term priority.
Also in the State of Digital Transformation in Financial Services
- What are the top technology investment priorities in financial services?
- What are the top areas of innovation in retail banking?
- How does the industry see the impact of mobile on sales today and in three years?
- What is the role of digital in enabling human advisors?
- How does digital maturity differ by financial service sector?
Subscribers can access the full report as well as our recent Digital Intelligence Briefing: 2017 Digital Trends in FSI, in partnership with Adobe. These studies are also complemented by a new addition to the Statistics Compendium Series that is focused entirely on the sector.