Empowered through choice: how digitalisation is changing financial services

Digitalisation is changing every aspect of the relationship between financial services providers and consumers, and reshaping the expectations people have about the industry. In the age of Big Data, automation, Internet of Things (IoT) and mobile technology, consumers want to be in control of how, when and where they interact with companies. If an individual can work on the train, check their emails in the car and communicate with anyone in the world almost instantly, they will expect to be able to manage their finances at any time from anywhere.

Companies have faced numerous challenges in adapting to this new environment. The number of potential client touchpoints has multiplied beyond phone and email to include social media, AI chatbots, video and apps. Making sure client can easily access the information and services they need, with minimal hindrance, requires collaboration between teams, data analysis and intuitive product design. It may also require a significant overhaul of legacy systems and entrenched ways of working.

But the opportunities of putting clients in charge are numerous. By giving people the freedom to decide how they want to interact and fit products and services around their lives, companies can become a deeply ingrained and valued part of their client’s lives. Those companies that fail to keep up could be permanently left behind.

Changing expectations

Technology continues to advance at a breakneck pace. According to Mintel, the implementation of 5G networks around the world will link around 125 billion devices together by 2030¹ . Mobile technology is already blurring the lines between travel, work and leisure and untethering traditional location-based activities.

Client expectations about how companies should operate are also changing. By 2030, those born after 1997 will be almost half of the adult population. According to McKinsey, “These digital natives will expect seamless, omnichannel, real-time interactions integrated with the platforms they already use frequently—along with some we can’t imagine today.” Many clients already expect companies to tailor their products around them, rather than having to conform to set criteria or limitations. 24-hour access is also often a minimum requirement. Adapting to meet the changing needs of clients is common sense, but for some traditional services companies, to do so could require a revolution in traditional ways of working.

New ways to connect

Playing a central role in people’s lives, financial services companies are well placed to harness technology to empower their clients. But many financial institutions are still playing catch up when it comes to digital services. Surveys of financial services organisations show that only a small portion are currently offering advanced services via web and mobile apps, despite the growing appetite for it.

Similarly, institutions have been slow to adopt video interactions despite interest from their clients. Research by Spectrem Group shows that 61% of ultra-high-net-worth clients² are open to interacting with their financial advisers via video chat. Flexibility in how to access financial services will be particularly important to this segment of clients due to their uniquely global lifestyles and desire to manage their financial affairs from any location in the world.

With client expectations evolving as fast as technology, financial services firms might find they are already behind the pack by only offering ‘traditional’ digital services. McKinsey suggests that the digital services of the future will look dramatically different³, with clients setting the agenda in terms of communicating, whether by Snapchat, text messages or real-time video. PwC notes that a comprehensive digital offering can act as a gateway⁴ for consumers to have a greater number of financial products with one institution. This suggests that digital services are already an important differentiator for businesses.

The future is here

Financial services providers face a crucial opportunity. The ability to meet the changing needs of increasingly digital clients will be the next frontier for established institutions. But in the meantime, they face the challenge of catering for the needs of different generations, those who favour more traditional means of communication as well as those ready for a digital future.

Consumers are changing, and the financial services sector needs to change with them. Companies that can empower their clients by letting them decide how they want to access services will have an edge heading into the next decade. Get in touch to find out how our digital tools can give you new ways to interact with your clients.

Sources:

[1] Mintel 2030 Global Consumer Trends report
[2] https://spectrem.com/Content/video-chat.aspx
[3] Mckinsey - Claims 2030 dream or reality 
[4] PwC Consumer digital banking survey 2019
[5] Mckinsey - Insurance 2030: The impact of AI on the future of insurance