Other parts of this series:
- New Opportunities for Financial Providers
- Five Key Trends Characterizing Global Financial Services Consumers
- Emerging Consumer Personas in Financial Services
- The Financial Services Response to Evolving Consumer (Part I)
- New Customer Expectations and Demands: The Financial Services Response (Part II)
In the previous blog in this series, we introduced three new consumer personas identified through our global study of almost 33,000 financial services consumers.
Providers of banking, insurance and investment advice should be re-thinking and rewiring their distribution models to address these rapidly evolving consumers. We see six key concepts to keep in mind:
1. Customers are in control – get used to it. Financial providers used to control the customer relationship, but now consumers do. Retail financial services is no longer “business-to-consumer” (B2C)—it has become “consumer-to-business” (C2B). And loyalty is rapidly declining, as indicated by the high percentage of Nomads willing to use GAFA providers; Hunters and Quality Seekers also demonstrate a readiness to switch for their own reasons. To address these needs, providers should be developing new propositions, transforming the distribution network and creating models for sustainable growth.
New technologies such as computer-generated support, coupled with the proliferation of mobile apps, enable customers to perform financial activities with limited involvement from providers. Providers will need to equip customers with new technologies and apps, and rethink their approach to product development, to hand customers the increased control they want
2. Seek out new opportunities from data. Financial providers need to capitalize on the trend of consumers being willing to share more personal data, for example through capturing new data monetization opportunities. By implementing centralized data warehouses, advanced analytics engines and sophisticated CRM solutions, providers can obtain a 360 degree view of their customers in real time. Armed with this insight, providers can multiply the number of interactions they have with their customers. Banks, for instance, can reinforce relationships with customers by sending them relevant information to help with house-hunting, which could open the door to selling mortgage or insurance products further down the line. Similarly, auto insurers can position themselves as more than mere coverers of risk by sending notifications to car drivers about accident-prone areas.
Access to real-time data is key to promoting more customer interactions, and interactions that add value. More targeted marketing and sales activity will be possible as a result, as new opportunities for cross-selling and upselling emerge.
3. Consider your platform approach. Customers are spending increasing amounts of time on digital platforms such as those offered by GAFA (Google, Amazon, Facebook, Apple) companies. To remain relevant to customers, financial services providers need to reach them on these platforms with tailored products at the right time. This is especially true for Nomads, who are most open to digital innovation.
There are different ways to achieve this. Providers may seek to integrate their services onto third-party platforms, embedding tailored products at “point of sale” during other shopping experiences. This means developing the ability to customize products—such as tailoring loan terms or insurance premiums— in response to consumers’ immediate financial needs. An additional option would be for financial services providers to become “curators” of their own platforms that provide broader benefits to their customers across an integrated digital ecosystem. This would involve building new networks of partners.
In the final blog in this series, we will look at three additional strategic approaches for financial services firms.
If you wish to learn more about the survey, please visit our Financial Services Global Consumer Study page for additional information.