How Experience Can Deliver Business Resilience in Financial Services
by Christopher Young
posted on 05-06-2020
The significance of customer experience has changed overnight. Before the current crisis, the customer experience was about delivering “delightful, personal, and relevant interactions in real time,” said Shantanu Narayen, CEO of Adobe, at the recent Adobe Summit Live. Now it’s about “supporting critical needs in an exclusively digital world.”
The current processes of financial services weren’t designed for rapid response to dramatic changes in customer needs. The environment we face in 2020 accelerates the urgency to digitally serve customers. What were mild pain points are now far more acute and visible throughout the organization. Taking a week to change a web page or two weeks to send an email is no longer acceptable. It’s a wake-up call for those who aspired to digital maturity but had a three- to five-year plan to get there.
Many financial services firms have struggled to shift their orientation from product to consumer and from traditional channels to digital. Fortunately, the same principles for customer experience management (CXM) remain just as applicable and even more valuable. The core elements of CXM — real-time customer profiles, content velocity, and journey orchestration amplified by artificial intelligence — still form the foundation. But financial services firms need to rethink how they engage in a world where digital may be the only way to consistently do business.
The recent Econsultancy and Adobe 2020 Digital Trends Report: Financial Services in Focus identified significant challenges for financial services from a survey earlier this year. The learnings can help firms survive the major shifts now and come back even stronger in the future. Here are four takeaways to put into action, with insights from experts at Summit Live.
1. Develop a customer experience strategy and support it
For years, financial services incumbents have been worried about digital startups. Almost one in four named fintechs and insurtechs as their overriding concern. But there’s another daunting challenge from “big tech” digital natives like Amazon and Apple. They could trigger even more rapid disruption, thanks to greater resources and more user experience and engineering talent.
Financial services companies recognize the threat. They’re looking for ways to hone their competitive edge. Those who view enhancing customer experience as the most compelling opportunity increased from 23% to 27% since the previous Digital Trends survey.
Still, most don’t have the infrastructure, data, or people to make the most of the customer experience opportunity. Almost half of the financial services responders (49%) indicated they were either not very advanced or even immature in customer experience maturity. These companies are struggling now because there is no silver bullet for accelerating maturity. Moving forward requires the right organizational structures, technology, training, and executive leadership, along with a clearly defined and regularly communicated plan.
Financial services incumbents must not only commit to a long-term customer-experience strategy but also invest all the resources necessary to activate it.
2. Excel at customer data management while respecting privacy
Financial services outpaces other industries in recognizing the potential that data offers. Almost one in four responders see data-driven marketing as the single-most exciting opportunity in 2020. They plan to use it to deliver on customer journey management and personalization initiatives. In a year-over-year comparison, customer data management showed a 60% gain in importance as a key digital priority.
But financial services firms also understand the need to stay on the right side of privacy and consumer concerns. The main challenge lies in delivering engaging experiences while respecting user choices and preferences. Ram Parthasarathy, principal product manager at Adobe, noted that consumers themselves are worried as well: 49% say they are concerned about data privacy as they subscribe to personalized services.
“It is important to specify why the data is getting collected and also make sure it is being used only for the purpose it was collected,” he said.
Financial services firms need a strategic approach to user consent that understands the importance of transparency to customers and insures proper data labeling and governance within the business.
3. Power effective personalization with the right technology _and _people
Some 38% of the financial services respondents say their organizations are prioritizing targeting and personalization in 2020, compared to just over a quarter (27%) in other industries.
More than a third of financial services companies incorporate real-time personalized experiences in their business. They’ve taken a strong lead, with 36% incorporating customer behavior — not just demographics — into personalization efforts compared with 27% in other industries.
“For any personalization initiative, the people behind it are the most valuable resource,” Ram said. “The trend that we are seeing is the formation of personalization core teams, whose sole responsibility is to be the champions of personalization and to steer this initiative across the organization.”
Financial services firms must combine targeted data with agile processes and inspired people to develop successful personalization programs.
4. Reassess how to deploy technology and instill a culture of innovation
Financial services is less likely than other industries to have a cloud-based technology stack with integrated services in place. The likelihood ranges from 13% in retail banking to only 2 to 4% in wealth management and insurance.
But those who’ve revamped their infrastructure have already reaped the benefits. They’re 2.5 times more likely to have exceeded their top business goal by a significant margin.
Despite embracing artificial intelligence (AI), their slow and steady technology adoption may still disadvantage incumbents. Only a quarter of financial services companies use AI or bots to drive campaigns and experiences. Retail leads the way, but more than one-third of insurance companies have no plans for AI investment at all.
Financial services companies need to assess their current technology and build a more flexible, integrated infrastructure that uses data to better serve their businesses and customers. With that in place, they can explore the applications and impact of AI and other new technologies.
Move toward digital maturity now
It’s never too late to create a plan. The new Adobe online CXM Playbook evaluates six key pillars of digital maturity that include data and insights, scalable content, optimized personalization, and customer journey management. The playbook is designed to identify key gaps and, more importantly, provide a path forward with tailored resources and guidance that will accelerate the journey to becoming an experience-driven business.
Download the CXM Playbook today.
Topics: Financial Services, Digital Transformation, COVID-19