The businesses that fall under the umbrella term of ‘financial services’ are many and varied – insurance, hedge fund management, investment banking, stock brokering, credit services, and so on – but one thing that unites them is the challenges they face. Tech-driven change, for example.
To say the financial services industry is feeling the impact of tech-driven change is probably to understate the fact somewhat. Consumer expectations have shifted and are continuing to shift massively, while competition in the sector is growing at pace. Combined, these are urging financial services businesses to update their modus operandi – and fast.
And let’s not forget that there’ll be many businesses in the sector operating amid or in the wake of financial losses – in fact, RBS recently announced its return to profit after a reported nine years of losses. While the regulatory pressures facing the industry, especially in this, the year of both GDPR and PSD2, are mounting.
Having an extreme customer-first view of change, underpinned and enabled by digital technologies can help financial services business rise to the challenge.
Responding to consumer expectations…with digital transformation
A recent McKinsey article imagines a world of hyper-connected, dynamic insurance. It’s a depiction that might seem a bit far-off right now – far-fetched, even – but the fact is that this kind of tech-driven change is already happening, and it’s about to get even more seismic as we see the full potential of AI being realised in the next decade or so.
The same can be said for banking, where technology is having a significant impact on the way consumers interact with (and expect to be able to interact with) businesses. The use of banking apps, for example, had risen from 21% in 2012 to 61% by the start of 2017. Customers are well and truly embracing mobile, which means they’re embracing a whole new kind of immersion and expect seamlessness to be a given.
On top of that, startups have been shaking things up in the industry for some time now. InsurTech businesses pose a real threat to traditional insurance companies, what with all the digital innovation they’re capable of, and their consumer-led approach to doing things.
It’s a similar story with FinTechs. Challenger banks allow consumers to be pickier about where and how they manage their finances. Again, this has been achieved by FinTechs putting the customer experience front and centre of their business models. Think mobile-first platforms, straight-talking communications, competitive rates, personalised support – all of which serve to make the customer feel in control, listened to, and like they’re getting a fair deal. Which in turn means they’re likely to tell their friends and family about the experience – and since when has a bit of positive reinforcement via word of mouth ever been bad for business?
The only way for financial services businesses to stay abreast of this is to as they emerge – seeing them as an opportunity, not a threat. Also important is making sure they’re bringing the right skills and talent into the business, and ensuring their culture is set up to support digital transformation.
The challenge of digital transformation for financial services businesses
Digital transformation is by no means straightforward. It can be disruptive and complicated, especially if you’re a bank with complex, existing legacy infrastructure. But for traditional financial services businesses to stay competitive with their FinTech and InsurTech counterparts, it’s a vital shift to make.
A good place to start is by rolling out a unified communications strategy. Partnering with a provider that can deliver a combined voice, data and mobile solution, tailored to your budget and unique business needs, is the ideal way to make this happen. Businesses that do this can make the most of:
- A fully-managed service
- Reduced complexity and consolidated costs
- Disaster recovery and resilience to ensure business continuity
- In-built regulatory compliance
- API driven platforms
- Flexibility and scalability
- Innovative solutions – not the ‘Usual Suspects’
- Technology agnostic focus on customer experience and business outcomes
Financial services businesses in 2018 have many plates to spin – but digital transformation is non-negotiable. A unified communications solution is essential to making it happen, especially in large businesses where multiple lines of business, offices and branches all need to talk to each other. This kind of solution also means having a provider to take care of your IT infrastructure challenges, freeing the organisation up to focus on tomorrow’s business goals.
Adapted from 'How to combat challenges in the financial services sector with digital transformation' , written by Alex Ayers and originally posted to the official site of Gamma.