Focusing on Customer Experience
Which tools do financial services companies use to monitor their Customer Experience (CX) strategy?
According to a joint publication of GlobalData and Objectway – based on a GlobalData’s survey of financial services companies from around the world – surprisingly, the highest penetration is not of important systems such as Customer Life Cycle Management or Customer Experience Management, but of much less important systems such as Content Management Systems (CMS). For GlobalData Head of Financial Services Research Bartosz Golba, this raises an important question: “If you don’t monitor your Customer Life Cycle, how do you know where the pain points are? How are you going to innovate?”.
So, what will be the biggest changes in Customer Experience in the coming years?
For 94% of respondents, Artificial Intelligence (AI) is arguably the big winner. But what does it mean exactly? What do they intend to do with it? Interestingly, although most of the firms sing the praises of AI, only a few (16%) run meaningful and tangible projects – thereby showing that the practical application of AI to address specific goals like highly customized interactions with clients is still lagging.
Evolving the offering
75% of the largest players are evolving their services. If more traditional countries like Switzerland do it to a lesser extent (25%), those who do it assert it is primarily to serve new clients – often meaning younger investors with different needs and values than their elders.
So, will the unprecedented intergenerational wealth transfer everyone is talking about urge wealth and asset management firms to evolve their offering and adapt their communications strategy?
Arguably, especially considering that younger investors generally have a greater affinity for ESG investments – having positive social and environmental impacts along with better financial returns. Almost the entire market will thus be adding or expanding their ESG capabilities in the coming years.
Embracing the new drivers of innovation
- First, regulation: calls for tighter international regulation are inevitable, especially since the onset of the banking crisis in California and Switzerland. So, instead of seeing it as a burden, wealth and asset managers should see it as an opportunity to continuously review and adapt their business model. Lifting as much of compliance from advisors to a strong legal/compliance department with robust digital tools is essential for ensuring business efficiency.
- Second, competition: wealth and asset managers are facing an increasingly competitive environment, not only driven by tough economic times but also by a new breed of competitors, such as robot-advisors. In reaction to such a shifting landscape, companies should adapt their operating model.
Talking about competition, Bartosz Golba reminds that platform modernisation has become a necessity rather than a nice to have. The GlobalData survey clearly shows a switch from executives when it comes to investing in platform improvement projects. But before reflecting on it, they must focus on internal processes. “You can have a nice frontpage, collect all your clients’ data in a minute, but if it still takes you a week to open an account, you’re losing the benefits of having a sleek platform”.
The question arises then as to whether outsourcing or not. More and more, wealth and asset managers are turning to external partners, particularly in the tech industry to assist with their innovation plans. As reminded by Bartosz Golba, flexibility is the top reason to outsource an innovation project. “If you keep everything internally, you won’t be able to do everything you want but everything you can. So, you might need to go out to the market, to find the providers that could give you the flexibility you need to achieve the goals you set initially”.