Getting personal with financial services

Updated: Nov 20, 2020

Adapting to customer expectations

For a long time, we have thought relationship management is best carried out face to face. However, this is changing and Covid-19 is accelerating this change. There is a whole new level of interaction and we must consider what comes next. The mindset is changing and we are likely to move to new hybrid models of face-to-face adviser and machine interaction models.

Trust is everything in the financial services industry. We all need support and advice that has our best interests at heart - no matter how we receive it. After all, what we do today will provide security for ourselves and our families in the future. Technology can help to drive personalisation at scale - providing an individual and unique experience for all of your customers.

What investors are looking for

Figure 1 shows what people expect when seeking financial advice. Over 70% of people said they are happy to receive automated advice. With 80% stating the need for greater levels of interaction.

Figure 1: What investors want

While the need for assistive technology is speeding up, we must remember that technology is an enabler rather than a solution. The overarching goal is to provide great value for money by:

  • Working closely together even while being apart.

  • Creating loyalty with customer outreach and education.

  • Reducing attrition by providing excellent customer service.

  • Anticipating future needs and event horizons.

  • Tailoring advice to specifically address individual needs.

  • Offering real-time support.

  • Being proactive rather than reactive.

  • Operating across multiple channels.

A combination of technology and human interaction is necessary to satisfy these objectives. Switching between technology-driven collaboration and human advisors should be timely, transparent and appropriate.

Age is only a number

While this may be true, we are seeing significant differences in the way that generations engage and interact with technology. And also in the typical level of support that people in each generation require. Figure 2 shows generational bands and associated levels of interaction.

Figure 2: Different generations

In reality, the level and types of interaction will change for your customers. Look at what works for you and monitor engagement levels as you go. In this way, you can improve continuously.

The advice and support you provide can cover education - for example, teaching people how to use digital banking. Showing people how to guard against security and phishing attacks. This will increase the confidence of people who are perhaps more wary of online engagement.

At the other end of the spectrum, generation Z often prefers self-sufficiency with little or no human interaction. Gamification can play a part here - showing younger adults the progress they can make with smaller, regular investments.

There are many ways to develop customer outreach. Building awareness and providing support will increase loyalty and trust.

Digital assistants

A digital assistant (or chatbot) is a simple way to improve interaction with your customers. It can provide information at any time of the day or night. If you get up for a glass of water at 3am and wonder about the current value of your ISA, the answer is at your fingertips.

It is easy to build thresholds that transfer someone to a human when it's necessary to have a deeper conversation. Building FAQ (Frequently Asked Questions) where customers can find what they need using natural language is a great way to start and takes little effort. Whisper bots can help support teams and advisors to serve your customers better. As a conversation progresses, the bot provides valuable information to the customer representative.

A digital assistant can expose new services as you introduce them, allowing people to do more and more from a single entry point.

Ethics and transparency are essential

Just because something is legal does not mean it's ethical. Changes in legislation struggle to keep up with changes in technology. If your customers feel you have their best interests at heart, then they will stay with you.

We must consider bias and prejudice - this is not something that exists solely in data. Objectives can incite bias, our behaviours can include prejudice. Transparency is essential - if, for example, an algorithm refuses a loan application, there should be clear and explainable reasons.

With Artificial Intelligence, there is a trade-off between accuracy and fairness. Imagine a straight line between these two factors. You must choose the place along the line where you are most comfortable - while looking to maximise the benefits for your customers. To make informed decisions, we need to understand the consequences of deploying certain kinds of algorithms, and the costs associated with constraining them in various ways.

Key elements for success

Figure 3 shows four key steps for introducing new and emerging technologies into your business. Data processing and modelling are becoming more accessible to everyone as tools and technologies improve.

Figure 3: Key elements for adopting new technology

Planning and preparation are key to ensure you have clear success criteria and realistic expectations. As Peter Drucker wrote, "What gets measured, gets managed".

Moving towards real-time analytics

Figure 1 shows how customers want higher levels of interaction and also behaviour based insurance. Providing these services requires real-time analysis of data - taken from multiple sources. This moves us from an engagement schedule to a signal - trigger - action approach.

Figure 4: Responding in real-time

Figure 4 shows how scheduled events must change to real-time events. You will receive signals from a variety of sources that trigger certain actions to take place. Signals come from many places and the system learns to find the best actions for a combination of the signals it receives. A feedback loop helps to improve actions over time - depending on the related outcomes that these actions create.

Effectively it means that we are, by definition, in the right place at the right time.

Starting your journey

This article describes ways of adopting new technologies to interact better with your customers. It includes some pitfalls to look out for and ways to avoid them. If this is a new adventure for you, then the list below may help:

  • Map your customer's journeys and include the touch points between your customer and your business. Each touchpoint is an opportunity to improve.

  • Use a value-effort matrix to help you prioritise initiatives.

  • Educate people who will be affected (both customers and employees).

  • Define clear success criteria to help you measure your progress.

  • Decide on what's good enough and know when to stop. Beware of diminishing returns.

Modern technology does not owe us a living. It is ultimately the way we behave towards our customers that makes the difference. As someone once said, "If you reward the right behaviours, you will get the right results. If you reward only the results, you will get all kinds of behaviours".

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