Financial services companies that want to expand their digital offerings know as they are implementing new strategies, they need to continue to build their customers’ trust at the same time. This is one of the key conclusions of the 2017 Digital Trends in Financial Services and Insurance survey of 850 respondents by Econsultancy and Adobe.
Because the success of financial services has always been dependent upon a basis of trusting relationships, any new experiences — no matter how innovative or convenient — must continue to build on that foundation, and serve to improve customer relationships.
Chris Allen, founder of FirmTree, a new technology company that builds marketing resources for financial services entrepreneurs, agrees that quality customer experiences that build trust are key for any company in that industry. He says, “The next wave of innovation around customer experience requires technology-enabled capabilities across data and content to build, manage, and deliver experiences that build trust.”
Quality customer experiences are more essential than ever in the financial services sector, and hinge on different types of personalization for different companies.
- Banks report their top priority as growing their client base. Therefore, the experiences they deliver are designed to attract new customers by offering a wide range of products and services to those who interact frequently with the company as they check balances and pay bills. The personalization they offer must match the right product or service to the right person.
- Insurance companies, on the other hand, offer a more complex set of products and services, so personalization efforts need to focus on making the choices for coverage easier to understand.
- Wealth management groups cater market commentary, analysis, and product information to advisors, institutions, and investors. Their personalization goals are to make the experience and information as valuable as possible to gain preference over competitors.
To reach these goals, financial services organizations need to enable data-driven, personalized customer experiences across channels — and at scale. High-quality experiences will continue to build the trust necessary for long-term, loyal relationships that impact the bottom-line.
The state of customer experience in financial services.
Another report, Digital Banking Report, Improving the Customer Experience in Banking, cites that while 35 percent of the 250 banks surveyed said they had a formal customer experience program in place, only 66 percent of them said their efforts have had a moderate impact, and only 28 percent said their program had a significant impact.
“Unfortunately, the objective of delivering a positive customer experience has been secondary to other bank priorities, resulting in a transactional banking relationship for the customer,” the report concluded. “For financial organizations to change this dynamic, and meet the evolving needs of today’s customers, there must be a move from cost reduction to customer experience enhancement.”
According to John Bodrozic, co-founder of HomeZada, a personal finance platform for people to manage the value of their home, his company is seeing increased momentum by expanding its digital footprint to give homeowners a higher quality customer experience.
“Insurance and financial companies tend to think mainly about their initial transaction with their customers,” John says. However, he believes it’s important to think beyond the traditional insurance policy or the initial mortgage, and provide customers with value-added digital apps, content, and data to help them manage the financial investment of their home through the entire period of home ownership.
“Insurance companies need to renew policies every year, and mortgage companies want repeat business when it’s time to refinance or take out a home equity loan,” explains John. “Consumers are much more likely to do repeat business with insurance and mortgage companies when trust has been built by going beyond the initial need, and helping people be more savvy homeowners.”
Many financial services organizations realize the significant impact digital technologies can have on their bottom line — 51 percent of leaders responding to the Econsultancy report say that sales are influenced by digital channels. The industry is also seeing a surge in the innovation and adoption of new technology that is leading to impactful customer experiences. People now use mobile apps for myriad transactions, including taking photos of checks for mobile deposit, paying bills, and applying for loans and credit cards. HomeZada, for example, created a digital shopping experience that homeowners can use to buy insurance, and that they claim makes the mortgage process “easier, quicker, and more transparent.”
Financial services companies creating digital customer experiences need to consider the following requirements to get the impact they desire:
Personalize the experience. Know your customers and show you know them at each touch point. If you can keep track of who they are, they will have greater confidence that you can also keep track of their money. Digital experiences with mobile apps, online portals, and even ATMs are all non-human touch points that can inform human interactions when the time comes. Personalization enhances trust when financial services representatives can refer to their customers by name, or can recall personal preferences for certain services or transactions.
Demonstrate security and trustworthiness. According to Chris at FirmTree, security and reliability are two foundational elements of trust when it comes to financial institutions. “Biometrics on the mobile app or two-factor authentication make us think our account is more secure,” he said. “That chip on our credit and debit cards makes us think the card is more secure. And the ability to remotely deposit a check by taking a picture of it and actually getting credited — that demonstrates significant trust between a customer and financial institution.”
Make it relevant. The Econsultancy report highlighted two examples of companies that have created impactful experiences that customers want and need. Chase, a U.K.-based subsidiary of JP Morgan Chase in the United States, has created a 10-person newsroom dedicated to creating articles and videos on personal finance, retirement planning, and life advice. These are highly relevant to their audience. The Royal Bank of Scotland’s Superstar DJ program, which began in 2015, continues to be an industry-leading example of a bank making the customer journey the focus. Giles Richardson, head of analytics at RBS, implemented an organizational structure in which 50 “journey managers” test every possible journey to create the exact experiences that their customers desire. According to the report, in March 2016, RBS reported that it had grown its optimization capabilities exponentially, and generated more than $1.5 million in incremental revenue.
Think big…data. As Giles’ RBS team is doing, provide the ability to collect and process big data. Use it to inform product development and take action in real time. Bankers should reflect on, and invest in technology in which machine learning can develop and enhance customer experiences based on consistent behaviors or habits. Moreover, this kind of data can help bankers visualize trends and unspoken demand from customer behavior beyond digital interactions.
“You need to be connected to your audience, experiment with new content, back off if things don’t work, do it all yourself, work close to real time, appreciate segments and changing set lists,” Giles says.
Those who place experience first will win.
As the Econsultancy report and the examples mentioned above indicate, the financial services industry is making great strides toward enhancing digital experiences. Those that deliver experiences that increase their customers’ trust in their services — online and off — will beat out the competition.
Read more about the state of customer experiences in the financial services industry in the 2017 Digital Trends in Financial Services and Insurance report.