Finance is an industry that has been radically disrupted over the past few years. Innovation has transformed offerings within the sector – and the results have left customer expectations higher than ever before.
Whether it be neobanks or challenger banks like Monzo forcing legacy banks to rethink their customer experience offerings‚ InsurTech startups like Honcho Markets reversing the process to the benefit of the customer or even the rise of digital currencies allowing for increased anonymity and security‚ the way organisations within the sector think has been drastically altered.
Although traditional finance organisations are becoming increasingly embracive of FinTechs and innovation‚ the jury is still out on whether they represent an opportunity or threat.
Indeed‚ organisations within the two areas often appear keen to accentuate the differences between their offerings. FinTechs will argue that legacy organisations are slow‚ stuck in their ways and subsequently incapable of providing a similar level of customer service. The flipside‚ of course‚ is that with time comes trust – something those established organisations enjoy in abundance.
The differences amongst the new-age and legacy financial organisations got us thinking. Not about what separates the organisations – but what links them. Customer habits can change quickly. Perhaps overused‚ but examples include how SkyScanner has changed travel‚ how Amazon has altered retail or how Netflix transformed entertainment.
The lesson that should be learnt from these examples is that all organisations should surely remain at least somewhat open-minded – a point perhaps more important to those who’ve been in the market a long time. Why? Because brand trust is no longer sufficient to survive. With well-respected brands; Monarch in travel‚ Zavvi in retail‚ Blockbuster in entertainment now all fallen‚ there can be no starker warning of that.
But the question we want to answer isn’t whether it’s time for classic and disruptive organisations to learn from each other. Is there a secret to survival in the industry? Perhaps we just answered that above. What we really want to know is whether there is a secret that all finance organisations can exploit to help them thrive.
At hedgehog lab‚ we believe there is. Exploring similarities between the organisations and the plans of industry innovators and mainstays alike reveals one area that all leading or ambitious organisations are looking to exploit; Data. Why? Because marketers across the world are looking for ways to truly personalise offerings.
That in itself is nothing particularly new. Looking again at our previous examples‚ remember how SkyScanner update you when a flight price changes‚ think about how Amazon recommend product you have a genuine interest in or even consider how Netflix adjusts artwork of programmes to try persuade you to tune in.
What is fairly new‚ is the concept of using this to benefit both organisations and customers within the finance sector. But think about it – which industry really knows more about you? The potential for the sector to assist in a broad range of areas is hugely exciting.
How can financial organisations‚ of any era or nature‚ begin to use data effectively? The difficulty certainly isn’t in gathering it. In fact‚ they have a wealth of information around each of their customers – that’s half the reason the potential is so large. Instead‚ companies must focus on figuring out how to use said intelligence in a manner which respects privacy‚ isn’t excessively invasive and offers genuine value to the customer.
Use of data and the potential for personalisation of finance offerings represent a huge opportunity‚ for all. The brand trust which established organisations may not be able to rely on to sustain themselves throughout disruption could also be their saviour. Customers of respected organisations may be more willing to allow access to their data in exchange for the opportunity to enjoy dramatically improved services. Elsewhere‚ FinTechs often enjoy dealing with audiences full of innovators and early-adopters‚ naturally more willing to explore the benefits of data sharing.