Three trends shaping the financial services industry

PEX Network’s latest report, Driving quality customer experiences in financial services, dives into the need to drive quality customer experiences.

Featuring experts from the likes of Standard Chartered Bank and MSU Federal Credit Union, the report dives into how changing customer expectations create the need to offer innovative services to avoid falling behind digital-native competitors.

Below we summarize three takeaways that were drawn from the report.

Customer preferences in financial services are changing

For many financial services organizations, the last few years have seen the demands and preferences of customers shifting. This has been in large part due to the advent of the Covid-19 pandemic and the ensuing disruption that businesses are still trying to recuperate from.

The primary catalyst of this change has been the shift to remote working as physical bank branches began to close. Many customers now have a far greater need for online, digital solutions that will aid them in managing their finances from the comfort of their own homes.

In the report, Vinod Srinivasa, operational excellence professional at a US-based multinational bank, explained: “Customers are looking for digital convenience for most of their day-to-day financial transactions and are expecting their complex and critical scenarios to be handled seamlessly. Banks need to carefully plan their multichannel presence so that business infrastructure keeps customer and product data synchronized across channels. This would provide a seamless, connected experience to the customer.”

If financial institutions are going to remain competitive they will need to take action to ensure that these shifting customer demands are met. If customers feel they can attain a more efficient and convenient method for managing their finances, they may just seek it with digital-native competitors such as challenger banks or neobanks which, according to Srinivasa, offer innovative products and superior customer service that satiates the tech-savvy generation.

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Partnership with fintechs pave the way toward optimal customer experiences

In 2022 there is a plethora of options for financial customers with regard to innovative technologies and solutions that will help them to manage their finances. With a number of fintechs leveraging advanced technologies like artificial intelligence, such as Chime or Monzo, to provide smarter ways to save, invest or spend money, traditional banks are now facing an unprecedented level of competition.

According to Benjamin Maxim, vice-president of digital strategy and innovation at MSU Federal Credit Union, traditional banks and financial institutions should not try to directly compete with the range of fintechs offering services that they have not yet managed or considered to implement.

Related: How BPM affords organizations the agility to compete with ‘digital native’ competitors

Instead, Maxim explains in the report, the most effective way to ensure they are not losing customers to innovative start-ups and fintechs is to partner with them and leverage the work they have already been done to optimize customer experiences. This is what is currently being done at MSU Federal Credit Union as he notes.

“We have now formed a credit union service organization to partner with fintechs, make new investments and continue to explore the industry [for new ways to help our members],” Maxim remarks.

By doing so, MSU Federal Credit Union can offer customers services and solutions that they previously were not able to, without the investment of time and resources that would be necessary to build such solutions from the ground up.

The process of innovation should be continuous and scalable

The demands and preferences of customers are subject to constant and continuous change and the pace of innovation in financial services has accelerated to match this.

As highlighted in the report, it is clear that the development and implementation of innovative customer experience initiatives should not be an isolated initiative. Embedding a culture of innovation and process optimization is an extremely difficult task, however, as Rajdeep Sadhukhan, executive director, operational excellence at Standard Chartered Bank, explains.

“It is one thing to swarm around a particular area, get the leaders aligned, take a deep-dive into the details and drive change, but doing this consistently and at scale is really tough,” he says. “You can get completely different outcomes [for process initiatives] under the exact same conditions.”

In light of this, Standard Chartered Bank has implemented a central data repository which shares data analytics globally, increasing transparency.

This offers visibility across the entire enterprise as to what steps are being taken to drive innovation. It not only allows the progress of transformation to be measured but also enables other departments in the business to repeat initiatives and begin the process of continuous innovation and optimization.

To read the insights of these financial services professionals in more detail, download PEX Network’s Driving quality customer experiences in financial services report.

What are your thoughts on the current state of customer demands and preferences in financial services? Let us know in the comments below.

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