By Jonathan Mobbs, Head of Finance Vertical at Maintel
New technologies in banking, investing, and insurance have dramatically changed these sectors in recent years: from online trading to mobile banking, digital currencies and app proliferation. Innovative new players and offerings are driving wave after wave of digital disruption and the Finance and Insurance sector is faster, bigger, and more complex than ever before. The market is highly attractive to nimble new market entrants who seek to shake up industries that have been comparatively slow to embrace digital transformation.
Digital transformation has also marked a change in consumer expectations. The balance of power is shifting from the provider to the consumer. Customers expect to be offered highly relevant products at the very best prices and complete ease of purchase. They also want subsequent interactions to be simple and available via multiple channels, as well as having instant access on any device when buying online or managing their financial affairs. A seamless omni-channel experience with quick response times and personalised products is now the customer’s minimum expectation. Finance organisations that fail to adopt digital technology to meet these consumer expectations risk delayed response times, sub-optimal service feedback, and a loss of customer loyalty.
With consumer expectations shifting, and the industry evolving at a rapid pace, now is the time for companies to embrace digital disruption and new innovative technologies. By doing so, business leaders can help their organisations address four key challenges facing companies in the finance and insurance industries – security, risk management, customer experience and operational efficiency.
Fighting the increased tide of cyber attacks
A major concern for finance and insurance organisations is ensuring operations are secure. In fact, according to research from the Boston Consulting Group, financial services firms are 300 times more likely than other companies to be targeted by a cyberattack— and dealing with those attacks and their aftermath carries a higher cost for banks and wealth managers than for any other sector. Covid-19 has compounded this threat, with criminals looking to take advantage of the crisis and expose vulnerabilities created by staff working from home at scale.
Financial and insurance organisations face a significant threat from cyber-attack, because of the valuable customer data they hold. Guaranteeing security is, therefore, paramount. In addition, PCI compliance and FCA regulatory requirements demand that systems and customer communications are secure, robust, and always auditable. Failure to comply with these regulations can contribute to brand damage and loss of customer confidence. So, a coherent security strategy designed to enhance protection, prevent cyber security threats (viruses, hacking, piracy and DDoS attacks), and align with best practice is crucial.
Mitigating customer risk
Technology can also assist with the profiling of customer risk. AI, for example, will be able to analyse data more efficiently, enabling businesses to employ risk identification and mitigation measures and gain actionable insights to improve competitiveness and enhance customer security.
Building excellent customer experience
Companies must also use digital transformation to enhance their customer experience. With the financial sector becoming more competitive than ever before, having a stellar CX function can be the difference between winning and losing custom. Many business leaders realise this, with research indicating that investment into CX will soar by 30% over the course of this decade.
As part of their digital transformation process, business leaders should consider implementing technology, such as Machine Learning (ML) and Robotic Process Automation (RPA). Both of these technologies have an important part to play in the drive for efficiency and improving the CX function. By streamlining customer service and automating processes throughout the ecosystem, teams can focus on providing an excellent customer experience. This is particularly true in finance and banking, as real-time, personalised products demand vast amounts of data instantaneously, adding burdens in terms of time and resources which AI applications can help to alleviate.
Driving operational efficiency
Finance and insurance organisations need to deliver an optimal blend of innovative and cost-effective technology to drive operational efficiency. Using a variety of technologies from disparate vendors is complex to manage and not always cost-effective. Digital transformation offers a convenient opportunity to simplify infrastructure by consolidating to fewer suppliers. By replacing existing technologies with a multi-channel contact solution from a single vendor, architecture can be simplified, costs reduced, and resilience enhanced.
By deploying technology that creates an omni-channel experience and allows the capture of customer data, finance organisations can make the buying experience more rewarding and gain new insights into customer behaviour. These insights can be used to recommend other products and services. Conversely, new market entrants need to broaden their product set once their initial offering has gained momentum.
Businesses in the financial and insurance sectors are facing many challenges at the moment, but by embracing digital disruption and integrating new technologies into their business, they can overcome some of these issues, while continuously improving the customer experience and driving efficiency.