There is a lot of money being left on the table by financial services firms — specifically banks and insurance companies — that are not pursuing a customer-friendly digital transformation to drive higher growth rates. This insight comes out of the 2019 Accenture Global Financial Services Consumer Study. The study analyzed consumer trends that impact banks and insurance companies. It identified four types of consumer personas: pioneers, pragmatists, skeptics, and traditionalists, along with five key universal consumer findings.

The study found that consumers want:

• Integrated propositions addressing core needs

• Fully personalized offerings from their financial providers

• To share data with their providers in return for better advice and more attractive deals

• Better integration across physical and digital channels

• To know that their personal and financial data remains secure

Additional insights on the five consumer findings

1. Appetite for integrated propositions to address core needs

Banks and insurance companies are under pressure due to the advent of digital channels. More players are entering the market. Financial technology companies are gaining share while existing or new regulations require resources and investments in people and technology. Banks thus risk becoming more commoditized if they only offer essential financial services.

Now is the time for financial services firms to recommit to staying both relevant to the consumer and educating them. Since consumers have core needs such as housing, car, health, travel, and everyday expenses — financial services firms have the opportunity to be their partner in addressing these core needs. That’s why they need to take the opportunity that a digital transformation provides to gain consumer trust which will then facilitate more accessible data consent and greater personalization.

Financial services providers should position themselves as the orchestrators of an ecosystem of suppliers. They have become more sophisticated over the past few years, but complexity should not be passed onto the customer. The customer doesn’t wake up one day and say ‘I want to buy a mortgage’ they say 'I want to buy a house’ and that process is emotional. It’s complicated and what they are looking for is an ecosystem to provide excellent customer service.

According to the study, 60% of pioneers (risk-takers, tech-savvy and hungry for innovation), 32% of pragmatists (ubiquitous, trusting and channel agnostic), 21% of skeptics (tech-wary, dissatisfied and alienated), and 7% of traditionalists (value human touch, tech-avoiders and losing trust) want these integrated propositions and are ready to pay for them.

2. Appetite for personalized service

Despite the notion that all customers might like a more personal touch from their financial services providers, we were surprised to the degree to which people wanted it. The data reveals that:

• 55% of skeptics and 30% of traditionalists wish to receive offers based on where they shop

• 52% of skeptics and 28% of traditionalists want to receive text alerts about their account activity

To keep pace with consumer preferences, financial services providers must actively target customers who have shown interest in personalized services with experiences that reaffirm brand values at every touchpoint during a customers’ journey with their providers.

Keeping on brand is essential for a unified consumer view. If a bank’s brand value is about being engaging and helpful, and the customer is buying a house, it is very important to ‘make it easy’ and provide relevant insights on the neighborhood, how much similar homes are worth, personalized mortgage offers, and a house protection policy through a user-friendly mobile app.

That’s why an investment in digital transformation must include personal journeys that engage customers throughout their digital and physical interactions – and if they choose to visit a branch, make sure they are engaged before, during, and after the visit. Of course, financial services players should activate such journeys only if customers give consent. Our study shows customers will grant permission if they see value in terms of improved service, speed, advice, terms, and conditions, etc.

Since consumers welcome personal journey experiences, they know they are providing valuable data to the companies for this personalization. That’s why financial services firms must be transparent with customers when collecting their information and disclose to them what they will do with it and communicate their data security measures to ensure their personal and financial data is safe.

3. Willingness to share data for reciprocal benefits

Despite an increased emphasis on data security, all personas from this study were willing to share information for mutual benefits. For example, 58% of traditionalists, 81% of skeptics, 87% of pragmatists, and 95% of pioneers were willing to share data in return for advice that is more relevant to their circumstances.

Data is the modern day gold rush, so financial services have more access to insights than ever before. If you use this data to learn more about your customer, it’s important they feel the benefits of this trust, and you provide them with better experiences. The challenge in this scenario is to do it in a way that continues to build trust with the customer. Probably the best example of data-gathering and trust-building with personalization is Amazon. They collect a lot of data, but they provide a lot of value during shopping journeys.

4. Integration between physical and digital channels

Financial service providers must also deliver integrated propositions for customers, whether via their physical or digital channels as consumers like to go between both. However, a couple of fascinating findings related to this point are that all four personas favored face-to-face interactions with their banks. Sixty-eight percent of pioneers, 68% of pragmatists, 63% of skeptics, and 66% of traditionalists and a low percentage across all personas prefer to use mobile devices or tablets to communicate with their insurer — 39% of pioneers, 22% of pragmatists, 22% of skeptics, and 4% of traditionalists.

The role of the brick-and-mortar is clearly important in strengthening client relationships and increasing brand value. There’s a lot of confusion surrounding the part of bank branches in the future of distribution, but consumers tell us they still value physical locations. In developed markets, banks have to operate with fewer branches and ones smaller in size, but despite these limitations, branches should always convey the banks’ brand values, provide the right advice, and support local community agendas through, for example, educational programs. In this way, branches become ‘critical marketing weapons.’ Too often, branch locations are overlooked, with limited/no investment they risk becoming ‘negative’ marketing drivers.

5. The role played by trust

The final finding of this study revealed that trust in banks and insurers is high and is the top reason customers do not leave their current financial services provider. Eighty-eight percent of pioneers trust their bank to look after their long-term economic well-being and 83% believe their insurer will look after their long-term financial well-being.

Today, the key differentiator between financial service firms is trust management. Since consumers will stay with or go with the brands with the best reputation for security, financial services CMOs need to shape an agenda that creates relevance to consumers, generates trust, thus driving data consent. At the same time, they need to make sure their institutions deliver the required and expected levels of privacy.

Takeaways

Digital transformation is now customer-driven, that means it’s all about the customer experience and needs, not just an update to a technology stack.

Banks and insurers must partner with firms who can assist them to undergo the customer-driven digital transformation needed to achieve these growth drivers. They must also ensure they have robust technology with the appropriate people and resources to make this transition.

We now live in a world where there will be select winners and many losers. For financial services, there is still a lot of money on the table: in developed countries winning banks will pursue revenue growth targets significantly higher than the current 1-2% average (i.e., targeting 10%). They should also set a goal for an increase of 50% in digital sales while also growing physical sales, and aim to significantly improve the customer experience.

It is possible to pursue these growth targets while optimizing distribution and marketing costs: this is the power of the so-called customer-driven digital transformation.

Learn more about driving higher growth rates via a customer-friendly digital transformation, download the 2019 Accenture Global Financial Services Consumer Study now.

Rohit Mahna is Senior Vice President, Financial Services at Salesforce.

Piercarlo Gera is Senior Managing Director, Global Managing Director FS Customer Insight and Growth at Accenture.

A copy of this article has also been published to the Accenture blog.