Despite the long-standing history of some financial institutions, many are still playing catch up when it comes to the world of digital.
To find out more about the challenges they face, Econsultancy and Adobe have just published new research looking how digital is changing the competitive landscape of retail banking and insurance.
The Digital Trends in Financial Services report is based on a survey of over 330 executives working across North America and the UK.
Throughout the report, the wider industry is compared with a subset of companies that are at the forefront of the industry.
As the companies creating the change to which others are responding, this group is referred to as “leaders.”
A useful lens for comparison and inspiration, leaders display important differences from the rest of the sample, dubbed the “mainstream.”
Here is what financial companies will be focusing on in 2016 and beyond.
Speaking to a new generation
57% of ‘mainstream’ respondents revealed that the biggest issue for their organization is an inability to appeal to new customers.
This barrier is particularly apparent for younger generations, fundamentally due to a lack of innovation in customer acquisition activities.
When approaching a financial service of any kind, the first instinct for people under the age of 40 is to look online.
For the traditional financial organizations their parents might normally use, this behaviour is not yet the norm, but finding ways to meet this digital expectation is likely to be a big concern from now on.
A shift to digital could also help to retain the brand loyalty of new customers.
Q. Thinking about disruption in your industry, what are your primary concerns? (Top two. Leaders vs mainstream)
Keeping up with the start-ups
Forget traditional rivals – there is now pressure for financial organizations to keep up with an entirely new set of competition.
40% of leaders in the industry see start-ups who are already meeting the demand for new consumer habits (by utilising technology) as the biggest threat.
With the amount of fintech companies in the market rapidly increasing, well-established companies are being forced to drive change or face the risk of falling behind.
Making use of data
We now know more about consumers than ever before. From purchase history to browsing behaviour, data is being collated at a staggering rate.
In 2016, the challenge for financial companies is to make use of this data in more relevant and engaging ways.
After all, there is no use in recognising the ever-evolving habits of consumers only to provide them with the same stagnant service or outdated content.
The key will be not only to understand how data can improve usability or increase sales, but also how it can ultimately improve the customer’s overall experience.
With 56% of respondents planning on increasing invesment in digital marketing this year, this new focus on customer experience will also have an impact on budgets.
Considering a mobile world
A lot of financial organizations have been reluctant to make mobile a priority in the past, mainly due to the ingrained belief that desktop will remain the most popular channel.
Customer concerns over security and privacy are also often a factor.
However, with 42% of leaders now believing that mobile will be a major source of new account sign-ups (and even overtake other channels) in the next three years, a shift to mobile, or at least an emphasis on it, looks likely.
For more information on this topic, check out the Digital Trends in Financial Services report.