Before the internet, the Financial Services Industry (FSI) hadn’t changed significantly for quite some time.
The customer experience across banking, payments, lending, real estate, capital markets and investment management was dictated by the business structure of the major players and a status quo was maintained by a ‘this is how we do it’ mentality for many years.
Then the internet came along, and everything changed. And the rate of change in recent years has been exponential.
Customer adoption of digital into day to day life has been rapid and organic. And with that adoption a huge transformation in expectations on the FSI has taken place.
What worked yesterday won’t work today or tomorrow.
Businesses need to think digitally or risk continuing to drift further out of touch with their customers.
Today, digital transformation affects every aspect of FSI businesses; from regulatory compliance, to attracting and retaining talent, to new business models, risk management, cyber security and cost containment. And no matter the aspect, customer experience plays a central role, and digital transformation has dramatically shifted the way customers interact with FSI businesses.
The best definition of digital transformation is actually on Wikipedia:
“Digital Transformation is the novel use of digital technology to solve traditional problems. These digital solutions enable inherently new types of innovation and creativity, rather than simply enhance and support traditional methods. ”
Failure to understand and adopt digital technology has a huge impact the on the customer experience of your brand and business. Without digital transformation, you cannot adapt to changes in current customer behaviour, or be prepared for the future.
Put simply, it has never been more important for FSI businesses to have a fully formed digital program, led from the top and enabled across all elements of the business.
In this white paper, we take a look at four key factors affecting all businesses in the FSI;
The FSI is still lagging behind when it comes to digital transformation, despite 87% of senior business leaders agreeing that digitisation is a top priority. 2
For example, according to PWC , some key changes to investment will focus on software bots and artificial intelligence, to streamline operations and improve the customer experience.
73% of financial services organisations in Asia Pacific claim they have a strategy in place 3
to digitally transform , and businesses have high expectations of the benefits, with a 70%4 improvement in customer acquisition rate anticipated by 2020 .
However, jumping on the latest buzzwords or tactical initiatives will not deliver a digital transformation program that positively drives business performance. If businesses only look at the bottom of their sales funnel, or think that spending money in digital marketing will change their business, they will be disappointed in the results.
It’s simply not enough to launch a new app or implement a new CRM; businesses need to be clear about what customer experience they want to deliver then enable this by thinking digitally by design, and to ensure the business still exists tomorrow.
Gone are the days of the autocratic CEO, leading from the front with unilateral decisions that could make or break a business.
Influencing change is now more complex, requiring more cross-company buy-in. Today, the C-Suite now comprises of new roles representing new business functions with areas of expertise that simply didn’t exist twenty, or even ten, years ago.With more people comes competing priorities. And with C-Suite executives now requiring more technical knowledge to make informed decisions, they require an array of internal and external advisors.
While increased collaboration is positive, it can slow things down. With slower decision- making, FSI companies are at risk of being left behind when it comes to digital transformation.
According to Gartner, 72% of strategists say their company’s digital efforts are missing5 revenue expectations .
Buyers have access to and consume more information than ever before.
With information readily available at their fingertips, buyers increasingly research vendors and services, form opinions and make decisions – without ever meeting with a company representative.
According to CEB Membership Leadership Council, B2B customers progress almost 60% of the way through their journey before they make contact with a sales representative .
And customers only spend 17% of their buying journey engaging directly with the seller .
What does the changing customer landscape mean for your business?
With 94% of companies agreeing that sellers only get one chance in front of the customer to deliver value, companies need to redefine their thinking around digital in order to reach their customers earlier in the buying journey.
Many FSI businesses are not selling in the way that customers buy.
Sales tactics such as cold calling, email list spamming and disruptive advertising are still readily employed by sales and marketing professionals. Research is now showing that not only are these traditional sales methods no longer the preferred means of marketing, they are actually now directly working against the sale.
34% of customers retaliate after undesired contact9 from sellers.
Unsolicited contact at irrelevant or inappropriate times does more to antagonize than to entice.
The businesses who win the customer are those who focus on the customer experience,and the customer experience of today is enabled by digital adoption.
The perfect storm is brewing in the financial services industry. Increased regulatory focus is shining a light on bad practice. Agile, independent disruptors are grabbing market share. And increasingly demanding consumers are making or breaking brands online by sharing opinions with huge audiences.
Companies who fail to implement a holistic digital transformation program throughout the entire organisation – and fail to simultaneously orient themselves towards customer experience – are at risk of being left behind.
1. Gartner, 2018-2019 Annual Edition Top Insights for the C-Suite, A Sales Perspective
2. PWC, Top Financial Services Issues of 2018
3. + 4. Microsoft, In the digital age FSI organisations need to deliver on new customer experience, not products
6. CEB Membership Leadership Council, The Digital Evolution in B2B marketing
7. Challenger, The Uncommon Customer Experience
8. Gartner, 2018-2019 Annual Edition Top Insights for the C-Suite A Sales Perspective
9. Challenger, Challenger Marketing Development Programs