Best Practices for Financial Companies entering the Digital Age


The finance industry has been undergoing quite a few changes over the last few years. Financial institutions that were once very traditional are now looking to adopt best practices used by more agile and flexible FinTech organisations. These practices that will not only enable these organisations to adapt to a fast-changing and increasingly tech-driven industry ecosystem, but also meet the rising expectations of their research-savvy and technologically inclined customer base.


In this article, we will analyse the current state of the financial industry as well as summarise 5 best practices for Financial Companies entering into the ‘Digital Age’ .

Finance: an evolving industry…

In past years, financial institutions have always been at the forefront of innovation and use of new technologies. Increasing automation and the use of electronic trading and payments was in fact one of the biggest focuses recently in this industry. All customer data and accounts were centrally managed by a third party system, which was the standard at the time.

However, we see nowadays that customers are evolving. They’re raising their expectations and changing their habits, and focusing more on obtaining a better overall experience rather than a better price point. As a result, the customer experience has changed in many ways.

Finance an Evolving Industry

For one, the introduction of new mobile technologies is driving a lot of institutions to adopt mobile apps, so as to provide their services to customers on the go.

A good example of this is the banking industry. According to a
recent consumer survey carried out by Apptentive, 80% of respondents said their primary bank has a mobile app. And of that 80%, 69% respondents actively use their bank’s app.

This holds true for other organisations in the industry as well. Take insurance company Pacific Life, for example. Pacific Life found that rather than utilising paper handouts and brochures, a custom mobile app was the answer to engaging with their customers. Wherever their customers wanted to go, the app made it quick and easy for Pacific Life advisors to respond and inform their customers.

No matter where the client wanted to go with their financial conversation, the app made it easy for the advisor to respond and inform and served as an efficient marketing tool that empowered team members throughout consultation.

Pacific Life

Then again, this is just one development that the finance industry is currently undergoing. If you really want to be successful, there are many more factors your organisation must take into account as it navigates the digital transformation.

Let’s take a look a few best practices that will help guide you.


1. Personalising the customer experience

One of the key factors in being successful in the coming years will be offering a personalised customer experience to your customers. Currently, 94% of banking firms can’t deliver on the ‘personalisation promise’. In other words, they’re not delivering the real-time and highly personalised experiences to customers that they initially promised. In fact, many customers feel that the relationship they have with their financial services provider, whether that’s a bank, insurance provider or asset manager, is largely transactional.

Customer Experience

Little do these organisations know that a personalised experience has a major effect on the customer. According to a study carried out by Evergage, 40% of consumers say that providing a personalised service would change their loyalty to their bank.

While financial marketers and customer experience managers agree that the future of digital finance is dynamic and personalized, few banks and credit unions have implemented these powerful technologies on their public websites and applications.

So why aren’t they catering better to these customers? There are two main reasons:

  • Data is too distributed and is kept in silos
  • There is a shortage of analysis and communication insights

In summation, their shortcomings revolve around not being able to effectively leverage big data to improve customer experiences.

Luckily this is steadily changing. Financial institutions are employing analytics tools to gain insight into the customer experience and find ways to personalise it. This includes monitoring every single outreach and interaction (via predictive analytics, recommendation engines, voice recognition, etc) in order to learn more about the customer and what they want.

2. Employing AI-driven technologies

This is a particularly interesting one for financial institutions, especially the banking sector. In fact, Artificial Intelligence (AI) and Machine Learning (ML) technologies have practically redefined how banks work (in terms of processes), what they sell and how they interact with their customers. As we mentioned above, this technology can even play a role in helping to personalise the customer experience.

By using the full spectrum of AI technologies, banks can ensure more processes are revolutionised by intelligent automation and create a frictionless experience for the customer. For example, a bank could utilise voice recognition to measure the sentiment of a customer that’s using a robo-advisor. With voice recognition, they can then gauge any frustration and switch the user to a human representative before their frustration escalates.

AI Technologies

To use this technology effectively, however, financial institutions will need to complete rethink how their organisation and workforce operates. For precautionary purposes, they’ll need to set strict guidelines so as to ensure that artificial intelligence is employed responsibly (and ethically).

Here you’ll find a more in-depth guide that will help you navigate how to use AI (specifically for finance).

3. Collecting (and analysing) consumer data in real-time

Software capable of collecting ‘real-time’ insights is highly desirable in the world of customer experience and in the finance industry. Why? Because the sooner you can fetch this data and draw insights from it, the sooner you’ll be able to start improving your online customer experience. In fact, there are several clear benefits customers can obtain from real-time data, including:

  • Speed of service. Ex: fast digital account opening or authorisation of identification.
  • Speed of consulting. Ex: providing proactive advice or offering personalised service alternatives.
  • Speed of product development. Ex: rapid release of new (digital) products.
  • Speed of customer experience. Ex: collecting real-time customer feedback and taking action on this feedback.

real-time consumer data

And don’t forget, a speedy data collection process calls for an equally accelerated data processing and analysis. In other words, never stop at data collection. The only way to make any meaningful improvements to your online experience is to collect data, extract insights and act on it.

“Banks have traditionally been very good at building product and then putting it in front of customers. They have never taken enough time to really think about whether they are solving customer problems. I think as we move into much more competitive arenas, where competitors are less likely to be other banks, this realisation that we are fundamentally now working for customers, ironically, is starting to land.”

Craig Corte, Chief Digital and Design Officer at Barclays Africa Group

4. Staying ahead of your research-savvy customers

For many financial institutions, the website serves as an information center for customers and prospects. Rather than rely on financial advisors or customer service, here they can read up on and educate themselves about the services offered or obtain background information on a particular subject.

Nowadays, this readily available (and digital) information is a major differentiator as many digital consumers prefer to do extensive research before buying a product or selecting a banking service. In addition, they require more transparency from these institutions

Research-Savvy Customers

In fact, international asset manager Robeco is a good example of a financial institution that does this effectively.

In an interview with Mopinion, Customer Experience Manager Sanne IJben shares,

“We want to make investing accessible and understandable to everyone. Not only can you start with a small sum and gain access to specific markets, but we also offer information and tools to make responsible investment decisions. Educating our customers to understand their risks and opportunities to reach their goals. Of course in an easy way (seamless experience). Therefore, we are focusing on providing self-service and online assistance when and where our customers need it.”

5. Adhering to data privacy and protection guidelines

The financial services sector has been slower than some of its counterparts, e.g. the retail industry, when it comes to exploiting customer data for marketing and/or sales. This is likely attributed to all the strict data privacy regulations and laws placed on organisations in this sector.

Unfortunately these regulations raise a few challenges for organisations that ARE looking to personalise their services for customers or use customer data to improve other service offerings. For example, the new Payment Services Directive (or PSD2) which will go into effect in September 2019 will regulate payment services and payment service providers throughout the EU in order to harmonise consumer protection. As a result it will require banks to provide other organisations with access to customer data via open APIs.

5. Data Privacy

And then there’s our old friend, the EU General Data Protection Regulation (GDPR) which requires all companies to assume full responsibility for privacy and security of customer data.

We could name several more conflicts that financial institutions will face in this area, but the key takeaway here is that data privacy and protection guidelines must be closely considered.

Time to get smart

It will certainly take time and effort to get your organisation away from those old school ways of working and caught up with a more digital business model. There’s no doubt about that. Nonetheless, it’s the future and for the financial services industry, it’s a do-or-die scenario, especially if you want to offer a frictionless customer experience.

Are you ready?

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