The Financial Services industry has had to significantly evolve its proposition over recent years and this will only continue in 2016. Legislative change and evolving customer expectations are leading companies to improve their offering, and discover completely new products and services, via digital channels, to grow their business within this changing landscape.
Today, 100% digital products or services are widely accepted by customers. According to a global study of almost 3,000 participants, 40% said they prefer self-service to human contact for their future contact with companies, and 70% expect a company website to include a self-service application.
By our very nature, people like to ‘self serve’. Completing tasks efficiently and independently gives us a great sense of achievement. These products can bring attractive margins to a business, but the users’ needs should be put alongside commercial objectives, to create truly successful solutions.
Digital can also act as a support to relationship-based propositions, increasing touch points between customer and brand in relevant ways to strengthen face-to-face interactions. Increasing transparency, and giving customers deeper knowledge of complexities behind decisions, can be simplified through well designed applications.
Digital can help to educate end users, with interactive, multimedia elements that help to explain complex information in a user friendly way. It can also help to build transparency between a customer and financial advisor, where the customer feels a deeper level of trust. Doing so, will help customers to engage more with the financial service provider, whilst also delivering opportunities to expose them to other value add services to further build loyalty.
Creating new services or products is rarely an isolated stream of development. The value for Financial Services brands, more often than not, lies in pulling multiple services together to empower customers, add convenience and increase transparency.
When making financial decisions you need a wide range of information to be fully informed – stock prices, market trends, news articles are all essential – not to mention the individual’s financial information. There’s rarely reason to reinvent services already in the market. Taking third party services, integrating them within an application and surfacing the information, in a user centric manner, presents a high value proposition for financial service brands.
Making the complex simple.
That said, however, it’s essential for success to turn down the ‘functionality noise’ to only the core things which will really add value for users. For financial services, this might be benchmarking against other individuals, projections and modelling around scenarios. These types of activities all account for the transparency, that is not only expected from customers, but ticks the legislative boxes, which RDR enforces. Digital should be used to lay out all the options in a financial situation, making the complex simple and leaving customers well informed and feeling like they’re getting value from their service provider.
Digital opportunities don’t just lie with the customers. For advisors and financial institutions, taking full advantage of digital means making good use of all the data. When approaching their IT architecture, it’s important to ensure that evolution of systems fits within the new demand and expectations put on them, to support the business. It’s important for companies to consider the architecture from a user perspective.
Within the financial services industry, this often means thinking about the APIs and services that are made available, the security measures that will be put in place and the interaction with other services that may be required.
It’s essential to make the delivery of these new products or services as simple as the customers find them to use. Client reporting, billings, relationship management and reporting, turns digital into a real enabler. This is regardless of whether it is for the brand customers or people behind the business and relationships.
On the enterprise front, Equiniti has launched a range of digital initiatives to evolve their business offering. Internal and external facing systems have undergone significant investment in the last 24 months to overhaul Equiniti’s products. For companies like Equiniti, simple and easy to use systems that are fully integrated and secure, make and break winning contracts, evolving their brand from a Pension Administration, into the FinTech space. And, with a recent successful IPO, they’re an enterprise in the financial services market firmly focused on the future.
It’s also widely reported how rapidly the high street banking sector is changing. Pressure from customers for better services, coupled with the Switch Guarantee and pressure on the banks to maximise margins in the wake of the financial crisis, are all elements leading to digital transformation. Having solid customer service, value added services and compelling digital products will be the making and breaking of major brands in the coming year.
Last year saw the launch of Apple Pay in the UK. For banks like Barclays, which didn’t support Apple Pay at first or HSBC, which didn’t turn on support until later in the year, there was an outcry from customers who wanted to have the option of using it.
TSB has boldly illustrated their commitment to digital, a forward thinking strategy of not only embracing services like Apple Pay – but structuring benefit packages around the use of them. MasterCard also committed to a large promotional campaign in the UK’s capital last year, offering free travel on Monday’s for customers using Apple Pay. Both were smart moves, which no doubt saw significant rise in people switching over when Apple Pay rolled out in the UK. Just under a million people switched their bank accounts in 2015. It’s down to the banks to create compelling digital propositions to tempt users to them.
User Centric Strategy for Success.
Legislation may have kick started the digital evolution for the Financial Services market, but digital centric customers and the chase for new business efficiencies and revenue streams is what’s causing a revolution. The landscape has changed. This change will only continue further this year – from what we expect from high street banks to independent financial advisors illustrating their value. The companies which succeed will be the ones who fully embrace digital as a core part of their business, and stop thinking of it as “an IT expense”.
By Karl Loudon, Digital Director