In a dog-eat-dog world, everyone is out for themselves. Community banks, credit unions and fintechs all seem to be fighting against megabanks dominance. But what if there was another way?
Tech giants like Facebook, Amazon and Google have transformed the way companies interact with consumers, providing superior user experiences with hyper-personalized engagements. For instance, an Adobe survey found that 67% of respondents said it’s important for brands to automatically adjust content based on their current context — and when they don’t, 42% said they grow annoyed when their content isn’t personalized. And yet, most financial institutions are behind the curve on delivering anything approximates the level personalization that tech giants provide.
Traditional banking institutions, tech giants, and fintechs should collaborate to meet this demand. Financial institutions bring experience, customer base and trust. Tech giants have the customer experience and resources. Fintechs tie both ends of the spectrum together.
The Script Is Already Playing Out in Retail
Let’s have a look at the e-commerce revolution. As the Web caught fire in the 1990s, futurists, business analysts and scholars published a wealth of opinion pieces with divergent takes on the impact web-based technologies would have on the retail segment.
Time magazine published a prediction in 1966 speculating that “remote shopping, while possible, would never become popular because ‘women like to get out of the house’.” On the other side of the argument, Netscape co-founder Marc Andreessen predicted the “absolute death of traditional retail” by 2013.
By the mid aughts, mainstream publications seemed to embrace Andreessen’s world view as their headlines spelled disaster for retail giants including gems from The Wall Street Journal such as “Shoppers are fleeing physical stores,” and “The Great Mall Exodus.”
Almost 20 years into the e-commerce revolution, we have the benefit of recognizing that much of this analysis turned out to be wrong. Consumers did embrace online shopping, and the internet has drastically changed the retail world. But brick-and-mortar stores are not extinct. Instead, we’ve seen a shift in how retailers approach their customers, from incorporating digital technologies to the in-store experience to implementing online shopping options. Organizations that were able to adapt ultimately came out on top.
Just as the retail industry was able to navigate through a rocky period, so too can the financial services industry. Here are three areas where we believe financial institutions, fintechs and tech giants should focus in order to deliver valuable products and services that breakthrough with customers.
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1. Embrace Incremental Change, Not Tectonic Change
In today’s quickly evolving digital landscape, tech advancements occur rapidly. As new technology allows for varied user experiences, it’s important to leverage agile design approaches to release products and services that represent small enhancements.
Focus on rolling out incremental user updates one at a time, then gather user data on those enhancements and iterate toward change again. By following this cycle, your institution will have time to keep up with the latest developments and adapt as new trends emerge.
Waiting to release the “game changing” solution or paradigm-shifting application eats up valuable time and resources, and risks your falling behind the curve. What good is launching a massive product update if the industry begins heading in a different direction?
As the pace of change increases, it’s wise for companies to stay up to date on the latest in the industry and factor that into the existing technology roadmaps. Conversational AI is a prime example of fintechs and financial service providers rolling out limited initial functionality, then building out the solution over time.
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2. Don’t Take Your Eye Off the Ball
In this era of evolving tech and the shift toward consumer-centricity, it’s easy to be distracted by the overwhelming sources of data. In addition to ongoing quantitative analysis, build in opportunities for qualitative feedback. Voice of the customer programs gather important perspectives on user experiences when the data is utilized properly. Capturing data in real-time while using predictive analytics will help maintain a consumer-centric strategy. Additionally, think about how you will respond to the data collection and how to determine customer satisfaction.
Keep in mind that the goal of consumer centricity is to satisfy the end-user. While data remains king, actionable and qualitative feedback is the ultimate consumer satisfaction test. Your institution must monitor how customers are feeling and why — this is critical to maintaining their satisfaction and identifying when and how to course-correct.
3. Find Partners That Complement Your Strengths
Large institutions have the luxury of resources to tackle tough technological shifts, but entrenched internal processes may stifle speed and agility to bring solutions to market. On the other hand, by partnering with fintechs to collaborate on products and services, consumers will benefit from the best of both worlds.
“Large institutions have the luxury of resources to tackle tough technological shifts, but entrenched internal processes may stifle speed and agility.”
Fintechs foster the collection of vast amounts of data and build relationships with customers, according to PricewaterhouseCooper’s 2017 “Global Fintech Report.” Additionally, innovators allow institutions to outsource part of their research and development and help bring solutions to market quickly. By combining the best components of each organization, we inevitably create a dynamic force of innovation that is well equipped to develop products and services that really solve problems.
As the consumer experience continues to evolve, we believe it is imperative that financial institutions, tech giants and fintechs all work together to establish a holistic approach to customer satisfaction. By keeping customer centric strategies at the core of their technological journey, financial institutions have a better chance at “future proofing” their products and services.