The financial services sector is one where established companies are most vulnerable to disruption from customer experience-focused competitors.
Customers are demanding the brilliant experiences they see with service providers in other industries and this is putting pressure on companies in the FSI sector to respond. New entrants are coming into the market with services built around a more mobile-friendly interface which focuses on delivering superior customer experiences.
As customer banking data is opened up to third parties, new propositions will continue to emerge as the sector faces exciting times ahead.
Our new report, Digital Transformation in the FSI Sector: Gearing up for success in a changing market, looks at the challenges that companies within the sector are experiencing as they face up to the need for digital transformation, increasing customer expectations and an ever-growing number of niche technology-enabled startups, and how they are responding to these challenges.
The research is based on interviews with senior executives across a range of companies, including the AA, Atom Bank, Aviva, AXA PPP Healthcare, Bought By Many, HSBC Singapore, Lloyds Banking Group, Monzo, National Australia Bank, OCBC Bank, Salesforce and UBS Wealth Management, APAC.
It was also supplemented with data provided by the 850 respondents who took part in our 2017 Digital Trends in FSI survey.
For more insight, Econsultancy subscribers can download the full report, but here are several key trends and recommendations emerging from the study.
The customer experience battleground
The need to deliver exceptional customer experience continues to be more important than ever and a priority for the companies interviewed. If companies are to succeed, they need to evolve and adapt their value proposition to meet the ever-evolving expectations of their customers.
This is backed up by Econsultancy’s 2017 Digital Trends in FSI survey which shows that one third of company respondents said that customer experience represents the single best opportunity for their organisation to deliver on their priorities for 2017. The significance companies in this sector are placing on customer experience is further reinforced when compared to just under a quarter across all sectors highlighting this as their top opportunity.
Which one area is the single most exciting opportunity for your organisation in 2017?
Timing is ripe to offer services built exclusively for mobile
Lisa Wood, Chief Marketing Office at Atom Bank, tell us the company saw “the timing was ripe for doing something that is more attuned to mobile and delivering something that is absolutely customer-centric.”
She continues, describing it as “A chance to start from fresh and to look at designing a bank for today, reflecting what it’s like to be a customer in today’s digitally enabled world. We wanted to do for banking what has happened in other industries in terms of disruption and saw no-one was really doing this in banking”.
Indeed, new entrants are seizing the opportunity to focus on mobile technologies for the generation of people who rely on their smartphones for products and services. They aim to make life easier for customers and are focusing on removing friction from existing processes and delivering something that is absolutely customer-centric.
Tristan Thomas, Head of Marketing & Community at Monzo, also talks of ease of use through mobile, saying “Our end goal is a current account that offers you an overdraft on your mobile which connects into many other services as possible to make your financial life super easy. This is how we are going to make ourselves different to other players in this space.”
Customer centric and digital throughout
A common theme among interviewees was a move from being product focused to customer focused and putting the customer first, providing value and services more aligned to customers’ needs and delivering greater personalisation.
Another key theme among interviewees was the need for strong leadership with an open, collaborative and focused culture where digital has to be integral to your strategy, not a bolt-on.
Agile working to be supported at the top
An agile way of working is helping to transform the customer experience, with new entrants promote core values of pioneering spirit and agility.
Companies interviewed highlighted this test-and-learn approach requires a dramatic change in mindset, which must be supported at the top. A key element of this is recognising some projects will fail.
Innovation has to start with the customer
A number of interviewees highlighted that innovation needs to start with the customer. Bought By Many sees technology playing a dramatic role in enabling the business to be more customer-centric, making the customer journey engaging, as well as trying to make it educational and straightforward.
Technology is enabling Bought By Many to provide a human feel as customers interact with their services. This approach, though, is about starting with the customer pain point not the technology per se.
Open Banking offers compelling ways to re-shape people’s and businesses’ experience of financial services, to provide excellent customer benefits and new seamless experiences.
In conclusion, as highlighted by Stephanie Myers, HSBC Singapore, “Done properly, a digital transformation is never completed. Even the most advanced brands should be constantly evolving and refining.”
For more insight, download our new Digital Transformation in the FSI Sector: Gearing up for success in a changing market report.