Digital is transforming the way consumers want to interact with banks and financial services companies.

Consumer demand for mobile and digital channels is forcing large antiquated institutions to rethink the way they do business. 

At a recent event, A New Age of Digital Finance, ORM managing director Keith Nation said: 

The millennials are expecting to interact with banks in the same way they do with Uber. The younger generation are time poor and they expect a world of hyper convenience; and they want a frictionless digital relationship with their bank too.

But digital transformation in this sector is slow to happen. Legacy systems, disparate data silos, internal resistance to change, lack of digital expertise, and tight governmental regulations are just some of the problems financial service (FS) businesses are trying to solve to meet consumer demand.

In the meantime, challenger banks and startup fintech companies are offering new products and services that are attractive to the new generation of digital-first consumers.

At the event, guest speakers from the UK’s biggest names in retail banking – including Barclays and TSB, along with wealth management company Allianz Global Investors – addressed their digital challenges and presented ways they’re overcoming these issues. 

Here is what was said:

1. Seeking out the single customer view

A digital consolidated data-set, which can be used across all channels to provide customers with a seamless digital experience, is the “nirvana” said Julian Brewer, Head of Digital Sales and Products at TSB.

But many banks, including TSB, have a long way to go; legacy systems, ownership rights over proprietary data and fragmented data sources are just some of the many stumbling blocks that prevent the single customer view becoming a reality.

Brewer said many of the banks are looking to find ways of bringing data together within a DMP; however this is a complex and costly endeavour.

TSB uses a tool called Tealium Audience Stream to create a CMP (Customer Marketing Platform) which pulls the limited data sources available to the bank together into a single view, and delivers many of the benefits of a more traditional DMP.

“From this, we’re able to use our first-party data to create real-time audience segments and tailor our digital onsite and offsite marketing to great effect, and make this experience more relevant to our customers,” he said.

2. Reclaiming digital content

In recent years, many asset manager marketers have fallen into the trap of giving their content to other sites, either for free (to aggregators) or have paid other publications (such as The FT or CityWire) to publish their content, in the belief that it will bring them closer to their clients and prospects.

This has been a mistake, as these aggregators and publishers have ended up owning the relationships with the asset manager’s customers, and not shared any information on how the content was consumed.

Tom Hughes, Head of Marketing at Allianz Global Investors, said: “Marketers need to understand the value of their own website and the insight it provides.”

He said marketers need a change of mindset, as websites should no longer be viewed as just “shop windows.”

“Websites need to provide a utility for clients; they need to have content that’s useful for them so they are are encouraged to return.

“Every click, and every interaction that happens your website, is valuable. If you can work out the causation between this activity and the sale of a product, that’s gold,” said Hughes.

3. Taking control of your CRM

The advancement of digital has come with an abundance of data; and more pressure for marketers to answer questions from the C-suite such as:

  • What’s the ROI on our spend?
  • Who’s been on the website? What did they click on?
  • Who opened that email? Where did they open it? From what device?

In the past, when marketing was a linear process and the CRM was used to manage sales funnels, marketers didn’t get involved in data. But that’s all changed.

CRM is now the hub of information and the crux of the relationship between marketing and sales.

Jason Lark, MD at Celerity, said: “If you don’t have a hold on your CRM and how it connects with all the platforms you’re building, and if you don’t know how each communication is performing, then you’re going to fail.

“You need a good website, with high performing content where you can capture data. [It’ll] underpin your relationship with your customers and your sales team.”

4. Putting the customer at the heart of the digital transformation

Barclays Bank has refocussed its business model and says it is putting its customers at the heart of everything it does.

“We want to help our customers hit their financial goals and achievements, and we’re going to use our transactional level data to do this,” said Sharukh Naqvi, Barclays Bank’s VP of analytics and personalisation.

Barclays is not the only company realigning its business model to put the customer at the core. Disney has invested heavily in the customer experience.

It’s created a piece of wearable tech, a wristband called Magic Band, which enables its customers to make purchases without a credit card or cash, gain entry to its parks and resorts, book Fast Passes, make dinner reservations and receive personalised offers.

As Brian Solis, leading expert on experiential business models, said in his latest book:

In order to be competitive, brands must get better not only at understanding and satisfying customers’ wants and needs but at anticipating them, even before customers know what they want and need.

This proactive experience is quickly becoming the new standard.

5. Catering for more sophisticated audiences

The millennial generation are internet natives. They are mobile-first and learn, work, shop and socialise online.

They expect speedy, efficient customer service across all channels, from any institution they choose to engage with, day or night. If financial services brands can’t provide great digital service, said Andy Farmer Executive Strategy Director at ORM, then these consumers will go elsewhere.

“The rise of fintech companies like Funding Circle, Nutmeg and eToro is no surprise; they’re very attractive to digitally-able younger consumers. These brands aren’t taking huge marketshare at the moment, but they are nibbling away at the edges.”  

Traditional banks are reacting to this change in a number of ways, such as creating “innovation labs” within their businesses.

And, in some cases, directly investing in fintech companies outright; all to keep pace with technology and remain competitive.

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