The New Year is upon us, and with it come new challenges and opportunities for the Financial Services industry. The industry is currently experiencing unprecedented disruption from factors like new market entrants (FinTechs, InsurTechs), evolving regulatory changes, increasing incidents of cyber-crime, mandates to reduce costs and deliver efficiencies across the enterprise, and expectations to deliver better customer experiences, to name a few. Amplifying all of this is the ongoing problem of customer perception, and feelings of trust and loyalty towards traditional financial institutions: despite seeing a steady increase in customer trust in financial institutions over the last five years, according to the Edelman Trust Barometer, in 2018 this rise has stalled overall, with countries like the US experiencing a 20 point drop.
In light of these challenges, I’ve put together five tips for Financial Services Institutions (FSIs) to help you adapt to disruptions in the industry and be successful in 2019:
- Become more responsive: To compete with the new entrants and competitors in the industry, address digital innovation and transformation both internally and externally, deliver exceptional customer experiences and employee engagements, reduce operational costs and increase profits, FSIs need to be more agile and responsive. As such, FSIs need to partner with vendors, implement platforms and solutions, and embrace cloud offerings to provide them with the agility to deliver responsive and sound solutions to market.
- Respond to ever evolving compliance, privacy and cyber threat: Continuous new and evolving regulatory and compliance mandates have imposed a burden both from a cost and resourcing perspective on FSIs. We saw MiFID II, PSD2 and GDPR go into effect in 2018. According to a PwC survey of US, UK and Japanese technology executives conducting business in the EU, GDPR budgets topped $10 million for 40% of respondents. Moreover, the upcoming California Consumer Privacy Act, further emphasizes the sentiments of regulators and consumers and their sensitivities towards data and privacy. Last year also saw a rise in cyber-attacks in the industry. According to Accenture, the financial services industry takes in the highest cost from cyber-crime at an average of $18.3M per company surveyed. In the Financial Services Industry, the impact of a breach is not solely financial and can be more significant as it directly impacts brand loyalty and trust and leads to customer churn.
- Achieve operational efficiency: Globally, FSIs are faced with mandates to deliver excellent internal and external experiences with lower costs. Redesigning processes provides efficiencies, delivers standardization, visibility, automation, reduces costs and risk, increases profit margins and delivers improved experiences internally and externally.
- Create exceptional servicing strategies for every segment and generation: Providing servicing that addresses the needs of the Baby Boomers, Millennials and the Generation Z is top of mind. Servicing needs to be consistent, connected, contextual, personalized, empathetic and, must be omni-channel. Each generation has unique needs and requires guidance, relevant and “smart” service in their preferred channel of choice. Unless serviced appropriately, they will choose to take their business to another institution. Financial Services customers today have become accustomed to the interactions from the likes of Uber, Netflix and Amazon – connected, relevant, one-click engagements. They don’t care that banks and insurance companies have siloed systems.
- Adapt a customer centric culture across the enterprise: By placing the customer at the center of every interaction and delivering personalized service, communication and engagement, FSIs will ensure that they are not only satisfied but are building loyal brand ambassadors. Whether browsing on the website, sending a communication, servicing, or handling a claim – engagement must be personalized, empathetic, humanistic and timely. A survey conducted by Smart Communications revealed that 61% of customers are willing to share more data with a financial institution if it demonstrated good use of the data by making communications more meaningful.
At OpenText™, we have products and solutions to address all the areas noted above and more, and we’ve love to work with you in 2019. We have been partnering with global financial institutions and insurance companies in their digital transformation journeys. In fact, 17 of the top 20 financial and insurance companies in the world use OpenText.