Is Today’s Financial Sector Keeping Up with Digital Transformation?

Keeping pace with digital developments is paramount in today’s landscape, as consumers search for convenience via connected devices. This is especially true within the financial sector opines Michael Worledge, Head of Financial Services at Harris Interactive, citing recent consumer research in this article, which suggests that constant innovation is vital for success, particularly when targeting the millennial generation

Digital innovation has created a vast appetite for online services. In fact, one pound in every five spent with UK retailers is now online, while internet grocery sales are set to rise 48% in the next four years. So, it’s no surprise that demand for digitized convenience – especially from younger demographics – is also impacting the financial sector.

According to a recent survey from Harris Interactive, more than half of consumers (52%) want to see more innovation in financial services, but the drive for change is particularly high among the millennial generation. In total, 66% of 18 to 34-year-olds would like financial service products that better meet their needs, while most consumers over the age of 55 are satisfied with existing products.

Unlike previous generations, millennials have grown up in a world where digital technology is an intrinsic part of life, with the average young adult touching their smartphone 45 times each day. And, with all subsequent cohorts born into a pre-connected society, calls for smart services as standard are only likely to increase.

For the finance sector, this means it’s increasingly vital to identify what today’s tech-savvy consumers want and how products can meet their requirements.

An ever-increasing demand for digital

The average high street bank now receives only 104 visits a day, with around 60 branches closing their doors every month across the UK. On the other hand, 70% of people across all age groups are now using online banking to pay their bills, transfer money, and view statements anytime, anywhere, with 70% of millennials happy to manage all their financial matters via digital devices.

In fact, 43% of the people questioned in the recent Harris research would like to manage their financial products and services online to an even greater extent. When asked about specific products, pensions (24%), mortgages (24%), credit cards, savings accounts, and financial advice (all at 21%) are the products that consumers want to manage more effectively online than they currently do. Innovative concepts in these areas, which take into account unmet needs, have the opportunity to be very compelling.

A more personalized experience

The rise of digital has enabled brands to deliver personalized messages to consumers, tailored to their needs, based on their interests. Looking specifically at financial services, Harris found that 67% of 18 to 34-year-olds want more personalized services and communications, compared to 55% across all age groups. 46% of consumers would like to see basic account details, such as maturity, renewal dates, fees, and interest rates more tailored to them individually, while 41% would like to have more tailored information about other products available.

Is an artificial intelligence (AI) powered customer service the future?

Artificial Intelligence (AI) already affects the industry. In fact, 86% of business leaders in banking and financial services are already using this technology, in particular across IT functions (63%), finance and accounting (40%), marketing (31%) and customer service (31%). And, it is set to rise even further in prominence in the near future, with chatbots projected to deal with more than 85% of customer interactions by 2020.

There will be hesitancy among consumers about the use of bots when discussing their personal finances, but if there were a guarantee data would be kept secure and private, only 24% of millennials would be against the idea, compared to 65% of over 55-year-olds. If security was guaranteed, 20% of people across all ages said they would be willing to discuss their financial products and services with a bot in branch, whereas 13% said they would do this over the phone.

In summary

The possibilities and availability of online channels has undoubtedly heightened the demands from today’s consumers, as they search for more tailored products to deliver convenience, speed, and a better all-round experience. The landscape is continually evolving, resulting in a need for all industries to persistently adapt. Therefore, to keep up with digital transformation, the constant development of innovative consumer-centric propositions within the financial sector is vital to meet and exceed needs, improve product accessibility, and achieve maximum customer satisfaction for businesses to flourish.