Cofounder/CTO at Vymo. Alum Columbia University & BITS, Pilani.
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It is a catch-22. While financial services must focus on accelerated digital transformation as part of their strategic priorities, the recession has put a spoke in the wheel. Most are diffusing this situation by choosing their spend wisely—investing in technology that will not only help them realize value from day one but pay back manifold when the economy stabilizes.
Some of the critical priorities that both business and IT leaders should address include the following.
• Omnichannel Engagement Capabilities: Just as you build omnichannel engagement channels for customers to interact with the bank or insurer, financial enterprises must flesh out omnichannel information exchange within the organization to ensure that any and all data about a customer surfaces at the right time to build seamless experiences for them.
• Seller Empowerment To Enable Customer Delight: Sellers work with multiple tools and glean meaningful data from across systems to engage meaningfully with customers. This is cumbersome, time-consuming and only partially successful without the right tools.
• Verticalized Tech Focus: Adopting tools and technologies designed and built for financial services will help resolve pain points more effectively and eventually derive greater value.
So what are the technologies that can help them address these priorities? And what are the trends that will define financial services in 2023?
While metaverse is going to take it slow, here are three that are going to leave their mark.
1. Deeper Adoption Of Cloud Computing
According to Statista, cloud adoption in financial services in the US is at 54% as of 2021. With the sheer amount of data that the industry will be handling, it is imperative that the remaining 46% board the bus. As banks and insurance companies seek to respond quickly to regulatory changes and respond to customers with agility and insight, they need faster and easier access to data, which is not something native to non-cloud infrastructure.
More and more FSIs will study the cost impact of the cloud on their business, and those already using it will optimize costs to get maximum returns.
2. Greater Need For Advanced Analytics
Advanced analytics is key to true customer profiling, omnichannel engagement and customer retention. A 360-degree view of the customer, segment, demographics and behaviors will allow sellers to understand precisely what customers are looking for and pitch a bespoke value proposition to them in real time. Beyond this, analytics will be able to redefine every process in a bank or a financial institution and make it more effective.
While FSIs are already using advanced analytics to detect fraud and identify risks, they need to use analytics broadly across the bank’s processes to see significant change. A key requirement for analytics to work is solid data management within the bank or the financial institution.
For example, one European bank combined text analytics and newer model algorithms to identify characteristics of a customer segment that was more likely than others to turn to a rival bank for a loan. This helped the bank develop a product to meet these customers’ requirements.
3. Tools Beyond CRMs For Sellers
In addition to the need for omnichannel engagement among customers, there are two more emerging trends in customer relationship management: personalization and shifting demographics.
First, post-pandemic, customers want to be taken care of by banks and insurance companies with the right products and services. How does the seller gather this data and get contextual recommendations on the right products?
Second, Baby Boomers are retiring, and a chunk of the workforce are millennials, followed by Gen-Zers. They expect relevant information on demand.
Existing CRM tools in financial institutions do not provide sellers with this kind of information. So FSIs will increasingly look at sales engagement platforms to sell customized contextual products to new-age customers.
As banks look to consolidate their customer base, provide increasingly meaningful engagement and build relationships to survive this recession, they also need to spend wisely on technology that can help them not only survive but navigate the environment towards profitability.
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