W&F Issue 3 2018

www.wealthandfinance-news.com 34 Wealth & Finance International - Issue 3 - 2018 The financial services sector has seen a large amount of flux and change over the last few years. With the growth of online aggregators, the pressure has been on Insurers and other services providers to look for ways to reduce churn and improve customer relationships. Today, people are increasingly used to shopping around for insurance and the best mortgage rate and there are now signs that even in banking customers have become more willing to move accounts. In both 2016 and 2017 c.1m people in the UK switched bank accounts 1 with 4.5m switches taking place over the past 5 years – as switching gets easier with the introduction of the Current Account Switching Service, keeping customers loyal is going to be harder than ever before for the traditional banks. Customers are now more demanding and less willing to remain loyal than at any time in this history of modern financial services and yet, strangely, in many other aspects of their lives customer experience is given far more focus than in financial services. New entrants are creating further disruption in the market. This fast-growing group of companies are in a position to challenge the established incumbents who, on the whole, seem to be less able to be flexible in their approach. Many of the new entrants are established with a first-rate customer experience at the centre of their offering. They do not have to worry about legacy systems and well-established, inefficient procedures and organisational shackles that impede incumbents. In an attempt to keep up with these new entrants there is an increasing amount of budget being spent on digital solutions by more established companies. However, on the most part this investment is done with little consideration towards the end-result. ROI is still being measured in terms of cost reduction not what impact it will have on the customer and the lifetime value that comes from a relationship based on loyalty. Customer first approach From the first online touch point customers are looking for a frictionless and efficient customer experience. Unfortunately, our work in this sector has shown that as customers land on their websites most providers fail to talk to them, regardless of whether they are current or potential customers. In reality, many initial engagements are poorly executed whether they are trying to communicate to both or not. Virtually every major player across the sector talks about themselves in their first interaction with customers. In our experience, customers, generally speaking, want to know you understand them before they will engage further with you. Most of the 2018 predictive trend data for the sector suggests that removal of friction from the customer journey is a priority for many providers. However, current and future customers are looking for very different things from their experience, and some providers are failing to recognise and act on this differentiation. Our experience has shown that if organisations in this sector focus on a few key points when considering changes to their websites they can achieve real success, keep current customers happy, reduce churn and encourage new customers to join. Current customers Current customers want ease of transaction, simplicity and security that works for them, not against them. Too often customers come up against bureaucracy, obstacles and challenges that put many off. If you are going to up-sell to existing customers then do it intelligently. Too many providers have little grasp on what services a customer is already using. For example, our bank recently tried to sell us professional indemnity insurance before letting us manage our account. This was particularly infuriating as we had already purchased the insurance through them, and they should have known that. Professor Chris Bones, Co-Founder and Chairman, Good Growth, talks us through how a client focus in a digital strategy is vital to success. Putting Customers at the Core of Your Digital Strategy is key for Success