“There was a notion in financial services that it was OK not to be very good in digital,” said Byron Van Dyke, managing director and head of digital at Morgan Stanley. “The attitude was always, ‘Let’s be a fast follower. Let’s not blaze trails.’ But users don’t care if you’re a big bank or a startup. They just want an enjoyable experience.”
Indeed, the Millennial generation, which will comprise more than one of three adult Americans by 2020 and 75% of the workforce by 2025, demands mobile-first, seamless experiences, similar to those of Google, Facebook, and Uber, regardless of the industry. In fact, 57% of Millennials would switch their banks for a better technology platform.
And changing customer expectations aren’t the only disruptive force for FSI firms today. Demographic shifts, new competitors, and technological disruption, such as multichannel and payments, are also sending ripples through the industry. Research from Accenture (PDF) estimates that competition from non-banks (think: Google, Apple, Amazon) could erode one-third of traditional bank revenues in North America by 2020.
The solution? Thinking holistically about experience, both online and offline, according to “From Fast Follower To Digital Pacesetter,” a new report by Adobe, CMO.com’s parents company.
“Financial services companies have a reputation for being very conservative and slow-moving. We need to react at the pace of our customers’ expectations, take risks, or get left behind,” said Giles Richardson, head of analytics at Royal Bank of Scotland.
According to the report, banks and other financial institutions need to accelerate their digital transformation efforts if they are going to compete for consumer time and attention.
Indeed, separate research from Adobe and Econsultancy found that the FSI industry is significantly behind other industries in their digital transformation efforts. A whopping 88% of FSI firms said their companies are about halfway there, or worse.
Adobe’s new report outlines five strategies for FSI companies looking to accelerate their digital transformation efforts. The first, and probably most fundamental, is to ditch the “fast follower” mentality.
“Whether a customer opens a direct-mail piece, receives a follow-up email, visits a branch, or applies for a loan on a mobile device, the entire customer experience should mirror customer needs perfectly,” Richardson said. “We must be everywhere customers are and personally cater to their needs at every turn.”
Assembling the right team and structure, looking at everything though the customer experience lens, delivering experiences on the devices that customers are using, and deepening relationships with existing customer round out the five strategies.
The good news: Most FSI companies are excited about the opportunities ahead. In fact, 34% said that optimizing the customer experience is the single most exciting opportunity in 2017.
“I think that FSIs are generally behind the rest in marketing,” said Rob Pinkerton, CMO of Morningstar. “What financial services has to do right now as an industry is get more persona-oriented. The customer is not at the center of the financial services marketing mix; it’s always product. That’s just not going to work, especially if you look at other industries and where they are headed.”
At the end of the day, the report said, FSIs should not “sell products” but create experiences to guide, power, and enable the consumer to control their lives.