As the fintech universe keeps converging, the distance keeps growing between the value provided by financial services, and the reality of what customers want.
Recent research by Capgemini shows that more than 70% of banking executives say customer-centricity is important to them; and yet only 37% of customers think that banks understand their preferences enough to deliver on them.
What exactly is missing for banks, insurers, payment providers; those who sit at the center of this new world of money management? How can you capitalize on key moments of change for customers, and win their loyalty time and time again, through being there with the service they need, exactly when they need it?
Leaving a job, launching a business, buying a house, moving countries, opening a joint bank account. These are all pivotal points in people’s lives; points at which managing money is a must: and yet these life-changing financial decisions have the potential to create the greatest friction in people’s ability to get where they want to go. It’s never been easier to switch banks. Digital-only offerings continue to push boundaries and make it simpler for people to move finances over for good, or add products and services elsewhere as they apply for a mortgage or finance a new car.
These moments of potential customer attrition are the windows of opportunity through which you can prove your worth as a service provider; and seize the chance to add value and stand out for your customers.
It’s perhaps traditional ‘brick-and-mortar’ banks like ABN AMRO we need to take a closer look at; those who are creating a set of services around life changes big or small, from open repayment platform Tikkie, to app Grip which helps you stay in control of your spending. By coming up with creative ways to serve customer needs, and then offering these services at the time it is most needed, banks like this are deepening the long-standing relationships they already have with their customers, turning these potentially ‘dangerous’ moments into opportunities for customer engagement.
Setting a new precedent for customer journey-based money management is something which heritage finance players have struggled with. Re-structuring for digital transformation is no small feat; and yet many have now caught up with newer fintech disruptors in placing new smartphone-friendly products in the palms of their own people - as well as building an ecosystem of digital advertising around their customer-base and their lookalikes.
But the competitive stakes get higher in the race to survive, and to continue winning the hearts of customers, finance companies must do more than stay on par with industry disruptors. They must differentiate through innovation in customer empathy, not just customer convenience. The answer to keep ahead, somewhat paradoxically, is through the data they have directly entrusted to you – the data that you already have.
Customer data (sometimes called first-party data) is an asset which many digital-only banks didn’t just forget about: it’s something they’re missing. Where fintech apps are built on decentralized cryptocurrency, agile technology and open APIs, heritage financial institutions are built on quality relationships, based on years of family-honored familiarity and trust – and data. Lots and lots of data.
The ‘crossroads’ or turning points that happen routinely in people’s lives create quality streams of information for these companies to use in capturing genuine interest and creating opportunities to build loyalty. At The Next Web Conference 2018, Sudden Compass’s Tricia Wang engaged audiences with her discussion about ‘thick data’ over big data; the notion that understanding the hopes and dreams of your target group doesn’t come from aggregating ad interactions, and staring at millions of disconnected data points on a dashboard, but through one-to-one interactions.
Of course, taking to the streets and talking to every high-value account holder is impractical once you scale into the millions. But more longstanding finance players have a stronghold of opportunities to personalize digitally through building customer journeys upon customer data, so they can be more relevant at the right moment: like offering complimentary start-up support to a customer who has enquired about a business loan, or offering travel insurance to someone who frequently transacts overseas.
It doesn’t mean that big data sources and large-scale campaigns aren’t important or valuable. But it does mean that these powerful engines should be used to supplement customer data-based journeys, not as a core or primary driver for customer outreach and service.
Again, direct relevance wins out. If customers can recognize and recall why you’re speaking to them about this new service - and it makes sense - all the more reason for them to stick around.
Regardless of fintech’s prominence in the headlines, financial services is not a tech product - it’s a people-based service. By stitching together customer context, tech players can create some semblance of connection by tracking footprints in Display data, summarizing someone’s life decisions through their ‘likes’ on social media, or by scrutinizing patterns in web browsing behavior on various analytics dashboards.
But this will only get the bank of the future so far in understanding what their customers - their most valuable asset - truly want as individuals.
The secret is sitting right in the systems and databases within their own walls, in a resource which many finance leaders assume is no longer relevant, accessible or actionable. A resource which customers haven’t unwittingly parted with by way of a third party, but given directly as a symbol of their trust.
To make it in a world of big data, remote connections and predictive modeling, financial services needs to make the most of the single source of information they can be sure holds the original truth and intent, as well as the key to their CX strategy - the data they already have.
This is the key to keeping customers, and the key to owning the future of finance.
Financial services customers expect their service providers to know them — and customer data holds the key to meeting and exceeding that expectation. Our new Financial Services insights hub has the best strategies for intelligently activating your customer data: