How Will the Industry Respond to Trends In FinTech?

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In this series of articles, We’ll be taking an in depth look at the report “Blurred Lines: how Fintech is Shaping Financial Services”. Due to the size of this report, each article will be broken down into sections based on 3 industries – banking, wealth management, and insurance. This article will focus on what exact risks and opportunities arise due to the disruption and how to counteract the disruption that FinTech is causing. .

What is the FinServ industry doing for the disruption?

From the inside of the industry, FinTech appears to be affecting a broad range of financial services. Although, the companies specializing in certain aspects of financial services believe that consumer banking and fund transfer and payments will be disrupted in the next 5 years. The graph below shows the results of the survey.

How is the current Financial Services Industry Responding to a Growing Trend In FinTech? Part 1The recent development of online banking platforms has greatly impacted consumer banking and fund transfers. Purely online banks, or banks with fewer physical branches, have begun to gain popularity due to the added value that is convenience. As an organic development from online banking, the technology to safely transfer funds and pay bills online has been developed.

There is also a high level of disruption in the insurance and asset management sector. 74% of insurers and 51% of asset managers believe that FinTech is going to cause disruption in their sector over the next 5 years. At the same time, outsiders believe that FinTech will disrupt those industries significantly less, signalling that there is industry knowledge of upcoming developments that hasn’t been diffused yet. The graph below shows the divide between industry insiders and outsiders.

How is the current Financial Services Industry Responding to a Growing Trend In FinTech? Part 1

What is the main cause? Digital experience. Clients are used to the experience other digital giants give, such as Google, Amazon, or Facebook, and they expect the same level of customer and digital experience from their financial service provider.

75% of respondents said that FinTech has made an impact on meeting changing customer needs and 51% said it has also made an impact on leveraging existing data and analytics. If these items were not on the to-do list for a company in the financial service industry, they sure are now – thanks to FinTech.

What are the members of the financial service industry going to do to counter the disruption?

  1. Banks are going for a renewed digital customer experience

The most important response from this sector is to implement solutions that banks can easily integrate or incorporate to improve and simplify solutions. Meaning, processes that increase customer experience just by reducing the amount of steps to perform an action or making it easier to do that action. The next biggest response is to move toward non-physical or virtual channels. While a portion of the consumers prefer a physical approach, banks must have virtual channels to compete with the changing industry.

  1. Fund transfer and payment priorities are security and increased ease of payment

The fund transfer and payments industry’s response to emerging FinTech trends included: creating advanced tools and technology to protect consumers from identity theft, fraud, and account falsification. This response isn’t necessarily one that could combat the emerging FinTech options, but it adds to the current value proposition. Since the existing companies specializing in fund transfer and payments have created a brand and acquired trust with their consumers, they only need to offer better value in comparison to the new FinTech companies. In addition to developing a more secure method of online payment and transfer, increasing speed of transfers in another common step to take in this industry.

  1. Asset and wealth management shifts from technology-enabled human advice to human-supported technology-driven advice

This industry will respond by improving data analytics to better identify and quantify risk and increased automation of asset allocation. The responses, however, will be leveraged with a human touch that can interpret the data and offer personalized solutions that fully automated solutions can’t.

  1. Insurers leverage data and analytics to bring personalised value propositions while proactively managing risk

Much like banks, the most important response the insurance industry will have is an emphasis on self-directed services. The increase in convenience increases customer experience as they are able to access all the information through an online portal. It can allow them to make claims, see their coverage, or access important documents. The next biggest thing is to differentiate their services by offering a usage-based insurance. As underwriting changes and technology becomes more advanced, the math behind underwriting can allow for more complex plans that allow for this. Usage-based coverage is another example of established brand to create and underwrite a complex solution.

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Developments in FinTech are causing financial service providers to move forward and innovate towards a better consumer experience. Part 2 will examine the future of FinTech and what strategies financial service providers should use to counter FinTech.

15 Inspirational Customer Experience Quotes that Relate to Business

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In today’s digital landscape, a great customer experience is crucial. Customers have the power to choose between competing companies with a simple Google search. As Doug Warmer, former chairman of the board of J.P. Morgan & Co said, “it’s important to remember that your competitor is only one mouse click away.”

Given that it costs 6 or 7 times more to attract a new customer than to retain a new one, customer experience is more important than ever. On top of that, consumers are 2 times more likely to share their bad customer service experiences than they are to talk about positive experiences. Research also suggests that it takes 12 positive customer experiences to make up for one negative one.

Providing a great customer experience has always been important – and always will be. However, the Internet has made an effective customer experience a major competitive advantage for any business. The connected, happy, and loyal customer has more power in today’s market than ever before.

There are many statistics out there speaking to the effects of poor customer experience on a business. Although statistics are part of the story, sometimes, greater insights come from quotes. There is certainly no shortage of inspirational quotes out there, but I’ve compiled some of my favourite quotes relating to customer experience. Here are 15 inspiring quotes that any business can relate to:

“Your most unhappy customers are your greatest source of learning.” ~Bill Gates

“Trust: The reputation of a thousand years may be undermined by the conduct of one hour.” ~Japenese Proverb

“As you’ve noticed, people don’t want to be sold. What people do want is news and information about the things they care about.” ~Larry Weber

 “It is not your customer’s job to remember you, it is your obligation and responsibility to make sure they don’t have the chance to forget you. ~Patricia Fripp

“If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6000 friends.” ~Jeff Bezos

 “Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” ~Steve Jobs

 “Innovation needs to be part of your culture. Customers are transforming faster than we are, and if we don’t catch up, we’re in trouble.” ~Ian Schafer

“Most people spend more time and energy going around problems than trying to solve them. ” ~Henry Ford

 “Don’t find customers for your products, find products for your customers.” ~Seth Godin

 Customers may forget what you said but they’ll never forget how you made them feel.” ~Unknown

“Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.” ~Chip Bell

“Here is a simple but powerful rule: always give people more than what they expect to get.” ~Nelson Boswell

“There are no traffic jams along the extra mile.” ~Roger Staubach

“You’ve got to start with the customer experience and work back toward the technology, not the other way around.” ~Steve Jobs

I thought it was fitting to finish off with the following quote by Jerry Gregoire, “The customer experience is the next competitive battleground.” By 2020, customer experience will overtake price and product as the key brand differentiator. Customers have more power and choice than ever before, and if they don’t like the experience they have with you, they will leave, with little chance of returning.

What are some of your favourite customer experience and engagement quotes? We’d love to hear them. 

3 Key Benefits for Digital Experience Platforms

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This post was written by Christine Reyes and appeared here first on Liferay.com.

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Business processes driven by customer needs are more than a popular trend; they are the driving factor behind successful digital transformation and company culture shifts.

Digital experience platforms are designed for companies that understand the importance of breaking down silos and bringing together data and channels in a way that can be shared among business units. Common features include analytics, customer context views, personalization and multichannel support.

Their goal is to enable companies to manage the elements of exceptional experiences with a clear view of business analytics, integration, comprehensive customer data and cost-effective implementation. Further benefits of digital experience platforms to digital businesses include the following:

1. Identify immediate needs in digital customer experience

As digital business becomes more personalized and unified across devices, it becomes increasingly important to interact with people at every stage of the customer lifecycle. Sophisticated data management streamlines the process of identifying customer pain points or gaps in communication, which can then be leveraged to improve digital experiences. This prioritizes what customers want without locking companies down to any specific technology or type of interaction.

Once companies identify immediate needs in digital customer experience, they can act on them from a place of knowledge, rather than trying to build strategies off of incomplete data. A digital experience platform will then be able to provide tools or integrate with the correct external products to address these needs.

2. Improve the accuracy of your marketing and customer engagement through holistic customer data and information

The first step to improving experiences is to offer the omnichannel interaction, and the second step is to constantly track, measure and analyze so that customer engagement can grow and evolve.

Digital experience platforms allow companies to track customer behavior at each digital touchpoint. As the Internet of Things (IoT) grows, companies will have access to more channels of customer data, enabling them to draw new insights. The goal is to discover patterns in customer behavior and constantly improve customers’ experiences, even before they ask for it.

Customer data can include basic contact information, demographic snapshots, psychographic data points such as details about personalities or lifestyles, transactional data, communications history with the brand, account preferences, responses to marketing campaigns, and site engagement tracked through clicks, browsing time and social media shares.

A digital experience platform will pull this data into one place that each department can access as needed through customized views. This ensures that the entire company is working with consistent, updated information and basing decisions on accurate, holistic insights.

3. Use integration and flexible architecture to stay on the cutting-edge of digital trends

A common burden of technology upgrades is the unforeseen costs when development takes longer or is more complex than planned. If a digital experience platform achieves an effective level of integration and flexibility, then it will be cost-effective over time.

Veterans of digital change know that a technology upgrade can take months or even years. Sometimes, by the time you get the technology and strategy right, the trend is in its last days and the industry leaders are already gearing up for the next change. This makes it risky to pursue any new digital trend, because it may have evaporated by the time your company finally gets the fancy new software configured for your needs.

In today’s quickly changing digital environment, vendor lock-in is a handicap, and any digital experience platform should also make it easy to integrate with outside products, not just the vendor’s own offerings.

Because a digital experience platform starts with the core components in one place and product, it would be a cost-effective, long-term investment that mitigates the risk in acting on a digital trend. This could potentially level the playing field for companies that don’t have the largest budget, provided they have the foresight and agility to respond to the shifting sands of the market.

Final Thoughts

A digital experience platform provides the capabilities that you need to produce a variety of user-facing experiences. The exact tools offered will differ by vendor, and it is up to companies to assess their goals and determine which components are required for their strategy. However, the unifying principle for digital experience platforms will remain the same: architecture that integrates core business tools and provides a foundation for future digital innovation.

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DXP: Digital Experience Platform

Read more about the digital transformation and how you can create customer-first digital experiences. Download Liferay’s Digital Experience Platform whitepaper.

Omnichannel is the Key to Optimizing Customer Experiences

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What does Omni-channel mean?

Historically, companies were focused on providing customers with the ability to transact in the channel of their choice.  Organizations were organized around channels, and each channel’s department had their own reporting structure and goals.  The departments often encouraged channel competition, but the end result was confused customers who experienced different offers, pricing and processes in each channel.

Omni-channel is a multi-channel approach that provides the customer with aseamless experience, whether they are transacting online, from a desktop or mobile device.

Today, companies are focusing on creating omni-channel experiences to ensure that no matter where the customer is located, or on what device they are interacting with, the experience is the same.

Online, mobile, and social media platforms have enabled customers to not only switch between channels quickly but to also use them simultaneously. It is a regular occurrence to see people in store aisles looking at product reviews and pricing on their mobile while deciding between products on a physical retail store shelf. They are using mobile, in-store advertising, and in-store sales representatives combined to help with their decision making process.

Why Omni-channel?

Unfortunately, there are way too many examples of companies that fail to deliver good omni-channel customer experiences. A few years ago, I called my bank’s 1-800 number to secure a car loan. Everything (or so I thought) was confirmed over the phone.  I faxed in my signed documents, and was told I could go and pick up my cheque at my local branch. I waited in line at the branch only to get to the counter and be told, “Oh no, you cannot just pick up the cheque”. I asked how they could be so disconnected and their response was, “Well, we are not the same as the call centre. We have different rules”.

The result was a very negative experience. I walked away thinking that the bank does not understand me as a customer, and clearly does not realize I have a mortgage, GICs, RRSPs, RESPs, etc… Not only were they at risk of losing my car loan, they now faced the risk of losing my business to one of their competitors.

Having been in digital since the days of Netscape, I am definitely a digital advocate, interacting digitally is my preference. But, there are certainly times when I prefer face-to-face interaction. Human interaction is a vital factor in a positive customer experience even in the digital age.

In fact, a study done by Accenture found that only 36% of customers believe digital channels are better than non-digital forms of interaction. Additionally, 58-73% prefer dealing with humans to get quicker answers, resolution on issues, and to get advice[1].

Omni-channel is the key to optimizing customer experiences statistic

Many studies have found that customers who engage across multiple channels are  more valuable customers. In fact, multi-channel banking customers purchase 1.4 times the products and are 15% more likely than digital-only customers to serve as advocates for their providers.[2]

Digital does not always offer marketers the ability to up-sell or cross-sell based on the customer’s needs. Digital can ‘recommend’ based products you are looking at in real-time. Sometimes, we see up-sells based on our previous buying behavior – but I still get irrelevant Minecraft recommendations because my son and I surf on the same computer. And rarely do I see up-sells and cross-sells based on my ‘stage of life’ or my ‘in the moment’ needs.
The ability to truly understand the customer is lost if their only interaction is online.

Ironically, many companies are also finding that the selling expense associated with digital exceeds the value of their digital investments. The savings from the efficiencies of customers transacting online are often offset by the necessity to offer lower prices through promotions and discounts – to compete in the one click away environment. Rate comparisons or insurance quotes are always 5 seconds away. Digital is further commoditizing financial products; foreign currency exchange, insurance quotes, and loans are available online.

Omni-channel is the key to optimizing customer experiences Statistic

In fact, an Accenture survey found that more than ½ of customers want their bank to proactively recommend products or services that would help them financially. And 55% said it would strongly increase their loyalty to the bank. Many would even pay for budgetary advice.

A simple idea such as the Investment Advisor making notes on a client’s life changes into an omni-channel CRM, could positively impact revenues. The in-branch bank manager would better understand the client and be able to make recommendations and offers of true value to the client.
Barriers to Omni-channel.

Offering proactive digital financial advice and counselling to help clients better manage their financial needs can provide valuable insight and offer huge incremental revenues and increased loyalty.

Barriers to Omni-channel

In order to embrace omni-channel strategies across the organization, companies must first understand the economic benefits of providing customers with the ability to interact seamlessly across channels. The silos need to begin to blend and they must agree that a one-size-fits-all approach to customer experiences will not work.

The story about how my telebanking institution did not communicate with my branch nor have the same rules for picking up my car loan cheque, was probably due to technology and/or the lack of desire to improve their processes. Omni-channel requires a focused customer-first agenda – a strong understanding of customer data and a willingness to change. Barriers include:

  • Inability to provide all divisions with a single view of the customer across channels
  • Inability to understand the customer beyond their buying history
  • Lack of system integration
  • Lack of training, education, processes, and inadequate change management

How to get started

The core of an omni-channel strategy is the ability to understand the customer.  Omni-channel warrants an outside-in view and a mapping of the customer experience from the customer’s perspective. The omni-channel approach puts the customer, not the business units, at the centre.

For financial institutions, a front-end portal or “window” into the back-office, can help bridge the silos. Starting with a single view of the customer, you can direct the client standing in the branch, help the bank manager understand the value of the client, the call centre to appropriately service the client, and give the Financial Advisor a better indication on which products to recommend. A portal is not as big of an undertaking as re-building the back office and it can create and connect personalized digital experiences across the omni-channels.

Considering the customer journey from an omni-channel experience instead of just one department or a branch’s interactions is a start. Understanding customers beyond the personas is the next step to creating fantastic omni-channel customer experiences.

Valerie Jones will be at the Digital Marketing for Financial Services Summit on the Power PanelOmni-channel Surmount Barriers to Transform your Omni-Channel into a Customer Centric, High Performance Digital Ecosystem.   June 2, 2016 at 9:15 AM.

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[1]  https://www.accenture.com/us-en/insight-digital-disconnect-customer-engagement.aspx

[2] https://www.accenture.com/us-en/insight-digital-disruption-banking-north-america-consumer-survey