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Financial services must focus on customer experience, digital pathways

Financial services must focus on customer experience, digital pathways

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By Tony Zhang ·
June 12 2020

Financial services must focus on customer experience, digital pathways

Traditional financial services companies are facing pressure to transform as new entrants focused on customer experience gain significant market traction.

Financial services must focus on customer experience, digital pathways
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The World Retail Banking Report 2020 (WRBR) was published on Thursday by French international consulting and financial technology company Capgemini and non-for-profit financial services organisation Efma. 

The report found that platform-based retail banks find it up to two times easier to increase operating profits, unlock new sources of value and improve operational efficiencies.

As the pandemic environment is moving consumers to interact more digitally with their financial services provider, platform models offer agility and scalability during uncertain times. 

“Consumers expect a seamless digital experience from their financial providers, as they’ve grown accustomed to ‘big tech’ in other parts of their lives,” Namrata Bose, regional technology officer at Capgemini said.

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Ms Bose told Adviser Innovation that traditional financial services companies were being challenged to meet these expectations given that ”digitally native new entrants had already focused on customer experience from day one.”

“Financial services that invest now in modernising their core technology and evolve it to a platform-based experience will simultaneously delight customers and grow profitably,” she said.

The report revealed that the global financial sector is in the midst of a historic transformation as nimble, digitally native non-traditional players continue to champion customer experience and redefine long-held principles to gain significant market traction. 

With over half (57 per cent) of consumers now preferring internet banking, up from 49 per cent pre-COVID-19, and 55 per cent preferring mobile banking apps, compared with 47 per cent previously, the stakes have risen further as the COVID-19 context continues to move consumers towards digital management of their finances.

The report suggests that financial services firms need to evolve into platform-based models to fuel the growth and innovation needed to stay competitive and that embracing new technologies will be critical to long-term success. 

Ms Bose said cross-collaboration between traditional financial services companies and fintechs had previously been slow but it had been altered by the onset of the pandemic. 

“COVID-19 has disrupted the operational structure of financial services, pushing each to think beyond what was once considered normal, before the pandemic [up-ended] it,” she said.

She added that consumer preferences were changing to be more digitally focused and financial services firms needed an “inside-out reformation through digitisation.”

“In the [post-lockdown] days and months that will follow, banks are reaching out to tech firms to rebuild their infrastructure for a robust digital foundation,” she said.

“The evolution has started with post-COVID banking and financial sector digitisation and automation.”

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