Keep it personal – supporting customer-centricity with relevant financial products and services
Since the beginning of the global economic crisis, the financial services industry has faced challenges like never before. Headlines around bankers’ bonuses, PPI mis-selling and Libor manipulation have led to a lack of trust from consumers, writes Joseph Sullivan.
Under-regulation and a lack of transparency have been identified as contributory factors to both the financial crisis and the scandals that followed. Tougher regulations have subsequently been introduced as a means of ensuring more effective competition, fairer treatment for customers, and greater stability for the overall financial system.
To comply with these regulations, financial services businesses are encouraged by the Financial Conduct Authority (FCA) to focus on selling products and services that are more in line with the requirements of their customers.
These requirements, however, are changing.
Changing consumer behaviour
Members of the “Customer 3.0” generation have an expectation from financial services, as from all other consumer-facing industries, for products and services that meet their individual needs. They want access to these products and services whenever they want, via any device or channel they choose.
A desire for the most relevant products at the best prices means that consumers no longer tend to be loyal to particular brands. They increasingly look online for information and to compare prices, and use social media to seek advice from peers, impartial advisors and unbiased brokers.
Considering their time to be precious, and regarding physical bank branches as inconvenient, consumers use digital channels to carry out transactions, interact with customer service, and purchase financial products and services.
Indeed, UK banking customers used mobile and internet banking for almost £6.4bn worth of transactions each week this year, and downloaded 15,000 mobile banking apps every day, suggesting a real need for convenient on-the-go services.
Furthermore, the ‘big four’ banks are facing competition from challenger banks, peer-to-peer platforms and ‘digital ecosystems’ with business models based on simplicity, agility and customer-centricity.
Relevance and innovation
To begin addressing these challenges, financial service businesses need to acknowledge the fundamental change in the retail landscape, where the high street branch is shortly to become a thing of the past. Banks including RBS and Barclays are currently in the process of removing counters to make room for more self-service machines for basic transactions, and Barclays recently announced plans to move 6,500 cashiers into new advisory positions.
Steps must be taken towards a more customer-centric approach to the developing and delivering of financial services and products in order to win back consumer trust and encourage loyalty.
Traditional banks need to join the new generation of financial service providers and their customers in their new natural habitat – online and on mobile.
With customers looking to save money wherever possible, financial service providers should be able to quickly offer the most relevant and innovative products and services, at the best possible prices.
By creating and offering targeted and relevant product bundles, promoting them with up-to-date and consistent information across all channels, financial service providers will be in a stronger position to capitalise on the value of their existing customers.
Lessons from retail
Financial service businesses can learn from retailers, who understand the importance of effective information management in meeting the growing demand from consumers for a consistent multi-channel experience, and how sales may be at risk if this demand isn’t met.
Delivering the seamless, multi-channel experience that customers expect requires more than information on products and services alone, with a need to manage details on cross-sell and up-sell opportunities, eligibility criteria, and terms and conditions amongst others.
The wealth of data attributes available, in different forms and from different sources such as customers and third-party resellers, can deliver invaluable insights and provide organisations with new opportunities to further improve their offerings.
Business intelligence processes and big data analytics can provide behavioural data to augment existing product information, which can be enhanced further still with the addition of social data, such as online product reviews or ratings.
To provide a truly consistent multi-channel experience, all of this information must be made readily available. Staff in branches and call centres will require access, as will third-party resellers, automated online recommendation engines, and across all of an organisation’s channels and lines of business.
Established financial service providers will then find themselves in a stronger position to hold off the competitive threat posed by the new, more agile challengers.
Traditionally, businesses in the financial services industry have been based on a department-centric model. This model, when combined with the significant amount of M&A activity that takes place within the industry, has inevitably led to a large amount of critical information being held in various silos scattered throughout an organisation.
To take the customer-centric approach required to compete, it’s necessary for organisations to effectively manage their information in its many forms and systems.
One such method is to deploy a Product Information Management (PIM) solution, which enables organisations to integrate and consolidate all of this information into one solution, providing them with a single and consistent view.
By automating mundane manual tasks such as spreadsheet management, PIM frees up valuable time and improves efficiency. With all information held in one central repository, amendments to products and services can be made in real time, across all channels, ensuring that all customer requirements are met.
PIM ensures a consistent, up-to-date and relevant flow of information across all of a business’s channels, allowing it to speed new and amended products to market, meet customers’ demands at all times, meeting compliance requirements by storing and tracking historical data, while remaining agile and flexible at all times.
Ultimately, PIM offers financial service providers greater insight into the requirements of their customers, and the means to meet these requirements faster and more effectively, regardless of channel. As a result, businesses are better able to maintain their competitive edge by taking a customer-centric approach.