What Other Industries Can Learn From Financial Services’ Digital Transformation
Yaron Morgenstern is the CEO of Glassbox, a leading provider of digital experience analytics for web and mobile applications.
Six years ago, Deloitte conducted a study among financial services organizations about how digital technologies were disrupting the industry. At that time, only 46% of respondents believed that their firms were adequately preparing for digital disruption. Now, the financial services industry has fully embraced digital transformation, broadly integrating cutting-edge technologies and setting an example for other industries seeking best practices for digitization.
At the center of financial services’ digital transformation success is the industrywide commitment to providing a superior customer experience that prioritizes customer needs and preferences. Accomplishing this takes the right tech tools and a willingness to listen.
Embrace A Fully Digital, Customer-Centric Approach
Banking, wealth and investment management institutions could be categorized as a legacy industry—slow to adapt, slow to change and holding tight to practices that were established decades ago. In the process of undergoing digital transformation, the industry learned to listen to customers’ needs and cater to them.
Customers rarely visit a branch in person anymore and most don’t want to. To retain customers, all services needed to be moved online—everything from deposits to loan applications to account creation. Other industries can learn from that approach, especially industries such as healthcare and insurance. Even if in-person services remain available, companies that develop a full-service digital experience and commit to transforming their core operational technology will be better able to serve their customers. This will also make it easier to adapt as customer preferences shift.
Let The Data Drive Decision-Making
In order to truly understand customer preferences and needs, businesses must look to the data. Given the enormous volume of customer interactions occurring on financial services institutions’ digital platforms daily, executives can quickly become overwhelmed by mountains of data, which makes it difficult to gain insights and make data-driven decisions.
To overcome this, most financial services organizations have integrated digital experience intelligence (DXI) solutions into their operations. Powered by AI, DXI captures and analyzes 100% of digital customer interactions, providing a holistic view of the customer experience, alerting teams to issues that need immediate attention. Executives can use DXI insights to make informed business decisions, to prioritize fixing technical errors before they significantly impact revenue and find revenue-boosting opportunities based on customer activity.
For example, one large digital personal finance company we worked with was unaware that a technical issue on its website was causing a large increase in incomplete loan applications. Using DXI, they were alerted to the issue and were able to understand the full scope of the problem. Business and IT teams were then able to fix the error within a day, preventing an estimated $9 million in potential revenue loss.
Businesses outside of the financial services industry should also include DXI as a part of their digital transformation or risk missing out on key learnings and benefits of digitization.
Launch A Mobile-First Strategy
For financial institutions, a mobile-first strategy is a must. Seventy percent of customers from the four largest U.S. banks use mobile banking apps, with banking app use growing at a steady rate. Mobile banking provides immediacy, convenience and a wider range of options than what’s available on websites. Today’s empowered consumer expects to be in control and be able to self-service—getting what they want when they want it. A well-built mobile app delivers that.
The future is mobile, regardless of industry. When considering the best path to digital transformation, businesses should lead with a mobile-first strategy, one that doesn’t just shrink down the website but thoughtfully takes advantage of mobile-specific benefits, including personalization, built-in camera, GPS services and real-time alerts.
Find The Right Tech That Does It All
In the early days of digital transformation, many tech solutions and businesses popped up, each offering a unique benefit and service. In recent years, partnerships, mergers and acquisitions have consolidated those offerings to deliver more value. The financial services industry—and its customers—have benefited from this.
For example, financial services firms are using digital experience analytics technology to catch technical errors and to detect fraud. Fintech startups are partnering with larger industry players to share data and create new ecosystems that spark innovation. Holistic all-in-one solutions help businesses get more bang for their buck and lead to happier customers.
Prioritize Security And Privacy
Security and privacy can’t be an afterthought in digital transformation, especially for financial services companies. When designing and developing digital platforms, businesses must begin to center customer journeys on privacy, consent and security. Forrester predicts that this will be a key digital experience trend in 2022.
To support this trend, new technology called reg tech has emerged to help financial services institutions facilitate regulation and compliance at a lower cost with greater accuracy than relying solely on human monitoring. Similarly, financial businesses are using AI-driven platforms to monitor for fraudulent activity.
Growing data privacy concerns and tightening regulations are impacting all industries. Even businesses that consider their digital transformation complete should assess their approach to privacy and security to retain customers.
Transform For The Future
The financial services industry has undergone an impressive digital transformation in the past few years, but in order to continually meet customer needs, financial institutions must iterate, adapt and be forward-thinking in their approach. Other legacy industries use financial services as a blueprint for digital transformation. Modernization and digitization move quickly, and giving customers what they want shouldn’t wait.
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