New technologies have had a huge impact on the financial services market in recent years. When the pandemic began in early 2020, financial service firms were forced to focus on digitalisation. Providers that invested in technology to stay aligned with their customers during lockdowns are now seeing the positive impact of their efforts. According to a survey completed by Broadridge, more than 50% of C-suite leaders in firms that have reached a high maturity level in their digital transformation journey have experienced an increase in revenues and profits as a result. Along with an improvement in profits, more than 60% of surveyed leaders reported that digitalisation has helped them make better decisions and improved planning.
While digital transformation is a hot topic for most financial services providers, not all digital-first efforts are successful. In this article, we’ll take a closer look at why digital finance is the future and how financial institutions can approach modernisation to ensure growth.
Putting the Focus on Customer Experience
As companies in the financial services market continue to invest in digital transformation, Forbes states that the primary goal for organisations is to improve the client experience. Both customer acquisition and retention are highly important for financial service providers today. However, retaining a customer has been proven to be less expensive than attracting a new one, making this a key component of successful digital transformations. If a bank or financial institution is operating on outdated technology, it can be very difficult to meet modern users’ expectations such as convenient, online services. Consequently, customers will move to companies that they feel can better serve their needs.
McKinsey found that focusing on customer experience in digital transformation, along with operational and IT improvements, could increase customer satisfaction by 20-30% and employee satisfaction by up to 10-20%.
Digital Transformation CX Touchpoints to Address
Even when focusing on improving customer experience in digital transformation, there are still many avenues a financial provider could take. According to Forbes, there are a few key areas that banks, lenders, and other financial institutions should pay close attention to when improving CX. These areas include providing an exceptional first interaction, improving customer communication, and implementing personalisation throughout the user journey. Let’s take a closer look at each key area and discuss what digital transformation solutions work best for financial clients.
1. Exceptional First Impressions to Improve Retention
With so many options on the market today, first impressions can make or break the customer experience quickly. This initial interaction can also affect customer retention later down the road. According to Hubspot, 92% of customers would stop purchasing from a company after three or fewer bad experiences.
When it comes to banks and financial institutions in particular, brand new customers are often required to provide a lot of personal information and documentation. For example, if an individual is applying for a bank account, they’ll need to fill out an application providing personal data and records. Digitising this first step helps improve CX by saving time and removing potential friction points during the initial onboarding experience.
A financial service provider looking to implement technology to enhance the initial customer experience can digitise:
- The process for collecting customer data
- The way the organisation obtains and stores documents
- Data validation to ensure accurate information and completion of applications
2. Improved Forms of Communication With Mobile
Digital transformation offers many opportunities for organisations to improve how they reach and engage with their clients. Tools like online and mobile banking can help reduce delays in communication, minimise missed information, and simplify problem solving. According to McKinsey, remote banking usage increased by 20-50% in the first few months of the pandemic. However, even coming out of lockdowns, it’s expected that the reliance on mobile will continue to increase.
Forbes claims that banks experience lower chances of success if they aren’t able to provide mobile experiences and communication. In fact, Forbes says that even if a bank or lender offers the lowest rates in the market but delivers a poor customer experience, their retention rate could suffer. During the early stages of planning for digital transformation, building convenient paperless communication and seamless omnichannel experiences across devices should be at the core of a company’s digital strategy.
3. Increased Personalisation
Personalisation in the financial services industry has become a must-have for providers to stay relevant and competitive in the market. For example, according to Statista, 56.1% of surveyed financial institutions worldwide said service personalisation would be an important factor in reshaping the customer experience. Customers themselves are also increasingly interested in personalised experiences; according to a Capco study covered by BusinessWire, 72% of survey respondents rated personalisation as “highly important", while only 8% said it wasn’t.
Integrating personalisation into a digital transformation strategy can include both simple or more complex offerings. Some ways for financial service providers to implement personalisation for better CX include:
- Cross-selling and upselling additional products that are relevant to clients
- Pricing based on customer behaviour
- Utilising predictive models for loans
- Making loan, portfolio, or policy recommendations
Financial Service Transformation with Liferay
As the financial services industry continues to evolve, organisations should focus on meeting today’s customer needs by creating a digital transformation strategy. With Liferay, providers can deliver customer-centric solutions that help meet user demands and differentiate themselves from the growing competition. Liferay offers financial service businesses:
- Self-service client portals that improve CX through personalisation and tools to manage their own accounts and new services
- Advisor portals that offer intuitive experiences to improve employee productivity and satisfaction
- Integration capabilities with the flexibility needed to circumvent siloed technology and legacy systems without disrupting current operations
To learn more about what digital transformation looks like in financial services and how Liferay can help your organisation take the first steps, download our whitepaper - The State of Digital Transformation in Financial Services.