Digitizing Financial Services: Five Ways to Start, One Way to Succeed
It’s easy to see why the onus is on financial service providers (FSPs) to be actively digitizing financial services. Accenture reports that 46% of FSP customers are now willing to use robo-advisors. PWC says nearly 60% of customers are seeking innovative spending analysis tools and up to 85% would pay a monthly fee to receive automated social media notifications from their bank.
Technologies like IoT, AI, social media and mobility have opened the floodgates of opportunity for FSPs. Bank of America now support as many as 980 million mobile account logins per quarter. Key players in the Asia Pacific are allocating up to 25% of their IT budgets to next-gen technologies to transform trading, customer engagement, compliance, and risk management. And 86% of European financial services firms now include digital as part of their strategy.
The financial services industry has shifted to an open, integrated, future-proof technology ecosystem that, when properly designed, promises endless customer experience (CX) benefits, competitive new business outcomes, and service differentiation. Here are five ways FSPs can be digitizing financial services now:
- Integrate Video: With the ability to create or embed custom, real-time communication capabilities into the CX, FSPs can embed real-time video into online and mobile touchpoints to deliver more personalized, interactive services. Consider, for example, how visual integration could streamline the process of reporting vehicle collision damage to an insurance provider. Or, imagine how video can cost-effectively improve the traditional ATM experience. It’s no wonder four of every five FSPs are considering video banking to drive better customer experiences and cut costs.
- Leverage chat bots/virtual assistants: Several brands have already rolled out chat bots/virtual assistants, and that number is only expected to grow as the technology matures. These solutions conversationally message with customers about everything from accounts to spending history. They can even push out personalized suggestions and offers based on real-time and historical data. Industry analysts estimate that European providers can realize cost reductions as high as 90% by automating workflows with solutions like chat bots.
- Employ robo-advisors: With two thirds of U.S. customers finding robo-advising features attractive, it’s no wonder the digital advice market is expected to be worth $500 billion by 2020. Using AI, banks can create intelligent machines that uniquely advise customers on everything from investment opportunities to personalized savings approaches. This is achieved using open, integrated architecture that enables a single, unified view of customers’ banking information.
- Create a virtual reality: Gartner estimates that 100 million consumers will be shopping in virtual reality by 2020. We think they’ll be virtually banking, too. Consider VR for wealth management: research shows that almost half of millennials are interested in real-time and forward-looking spending analyses, making VR ideal for visualizing spending and saving projections. In this same vein, augmented reality can be used to help improve savings behavior. In fact, a study from Stanford found that consumers who are shown a digitally altered version of themselves at retirement age are willing to put twice as much money into long-term savings.
- Anticipate engagement: At the end of the day, customers want targeted, personalized experiences. They want organizations to intuitively understand their desires and mitigate issues even before they occur. With the ability to seamlessly track, collect, and share data organization-wide, FSPs can utilize learning algorithms that bring intelligence into the last mile of resource selection to naturally streamline every interaction. Meanwhile, a 360-degree view of the customer journey enables them to stay ahead of every potential issue.
Financial services ranked as one of the top three markets to experience massive digital disruption this year. However, over 90% of FSPs admit they struggle to make digitizing financial services a reality. So, how can these organizations go from vision to execution?
The key is to partner with the right vendor—one that offers not only the right technology, but serves as a trusted advisor from initial strategy definition to implementation to ongoing improvement. To learn more about the “how” behind digital transformation for financial services, check out this short video or browse this resource guide from Avaya.