No one will disagree that in order to deliver the personalized experience that delights customers and keeps them coming back, you must have customer data. And financial services is in a unique position as far as collecting and accessing that data, because firms are required to do so in order to be compliant with regulations.
We know that the richest, most personal data comes from advisors and their client interactions. Advisors are on the ground floor and in the field, having in-depth conversations – online and offline – about their clients’ financial health, goals and concerns.
But a lot of this information isn’t captured by corporate leadership because it requires manual data entry by advisors into inelegant, siloed systems that serve just one purpose – customer relationship management (CRM), compliance, etc.
Advisors don’t get enough value from all this work, so they either just don’t bother or input messy data.
There is a huge opportunity to automate this data input and output process, to present “next best actions” that are valuable to advisors and hyper-specific to their workflows, and ultimately to create a differentiated customer experience.
How? The recently released 2018 World Fintech Report from Capgemini and LinkedIn argues that if traditional financial institutions are to provide a truly personalized, data-driven customer journey, they must collaborate with fintechs.
According to the report, which is based on a global survey of fintech companies and traditional firms (including banking and lending, payments and transfers, investment management and insurance), fintechs are redefining the customer journey in a number of ways that traditional firms must embrace or risk becoming obsolete, including:
- Higher personalization, with the effective use of available customer data providing personalized offerings and services without being overly intrusive.
- Increased speed of service, which is important because customers are used to getting things done quickly and digitally.
- Improved convenience, via anytime/anywhere services through any device or channel.
- Proactive insights provided by predictive analytics, which enable firms to understand customers’ needs in advance.
How Fintechs are Using Data in Their Customer Journeys
Exceptional customer experience isn’t just a matter of understanding the customer and providing relevant products and services. These days, it’s using predictive analytics to create an offering or recommendation that’s unique to each customer – and makes each customer want to return.
Following Amazon and companies in the retail space, fintechs are using predictive modeling and analytical tools that allow them to find “people like you” and “recommendations for you” based on aggregate data from similar customers and prospects, the report says. This allows them to provide ultra-targeted and tailored offerings based on customer profile and behavior.
Also borrowing heavily from the retail sector, fintechs boast design-based thinking and simple-to-follow user interfaces, making the customer journey fast, convenient and seamless.
Collaboration is Critical to Move Industry Forward
Since the 2008 financial crisis, banks have struggled with low-interest rates, declining revenues, customer distrust, lack of loyalty and rising expenses. Meanwhile, compliance with new regulations initiated since the crisis has stretched bank capital and dominated leadership mindshare.
Legacy technology issues have compounded these challenges. Most infrastructure investments were simply stop-gap solutions that were not designed for compatibility with the latest technologies. Rigid legacy systems lacked scalability and couldn’t process in real time.
These challenges don’t exist for today’s most successful tech companies – GAFA (Google, Apple, Facebook, Amazon) among them – whose tailored products and services have raised the bar in terms of customer expectations. And fintechs, far more nimble than traditional firms, have followed suite, creating a paradigm shift in customer experience that eliminates multiple pain points across the customer lifecycle.
For traditional firms going forward, innovation with a central focus on the customer is vital for survival and growth. That focus means having empathy with the customer, earning trust, simplifying the customer experience, and aligning with customer goals and expectations. And all of these are enabled through data-focused initiatives and the prescriptive insights made possible by the latest developments in fintech.
Says the report: “Now more than ever, it is no longer enough for traditional financial institutions to focus on what has worked for them in the past.”
Watch Hearsay CEO and Founder Clara Shih, alongside leaders from Betterment, Marcus by Goldman Sachs, USAA and others, debate on these issues in a “Fintech Faceoff” hosted by Capgemini and LinkedIn:
For more information on the 2018 World Fintech Report: