The financial services sector is currently facing up to calls for increased fee transparency and a better demonstration of customer value.
In recent years, frequent regulatory changes and a sometimes over-zealous product focus has meant that customer preferences have often finished last.
However, as financial information and advice is digitalised and democratised, the industry faces a comprehensive transformation.
Customer experience is likely to be at the centre of this, becoming a major differentiator by which advisers and providers can set themselves apart from the competition; robo-advice or otherwise.
Those who place it at the heart of their organisations, building services for their customers (rather than the other way round) will become future market leaders.
One of the primary headaches for customers in the financial services arena is compliance, probably linked to the familiar sinking feeling of opening a one page letter from the bank and finding five further pages of compliance in small print.
This predicament hasn’t been helped by the Financial Conduct Authority, which typically bombards providers and advisers with endless pages of compliance, which they are legally required to pass onto customers.
However, by incorporating the following changes, financial advisers and providers can improve customer experience in their industry:
Adopting ‘behavioural segmentation’
In one sense, the primary answer to the problem can be found in better understanding of customer preferences, also known as ‘behavioural segmentation’.
Such a model allows advisers to tailor information to suit their customers, presenting it in the form of numbers, graphics or face to face, for example.
Improving compliance and integrating behavioural segmentation must be viewed as areas of opportunity, allowing providers and advisers to get closer to their customers.
Technological advances mean they may also build value through the use of financial planning software.
Committing to the customer mindset
It may sound drastic, but for an organisation to achieve meaningful customer experience, the whole organisation must change together.
The following people factors as central to achieving great customer experience: The whole business has to align behind the customer and you must put your employees first.
Financial advisers and providers must demonstrate skills like empathy and develop a passion for making customers happy.
Furthermore, staff must get to know the business and its services through the eyes of the customer. If the compliance aspect is boring for advisers, then it will be doubly boring for their customers.
Improving customer experience through collaboration
While the FCA still has a long way to go, it is finally pushing towards making compliance information easier to digest.
For example, a recent ‘Smarter consumer communications discussion paper’ featured unprecedented use of video and images, with contributions from banks such as Nationwide and Lloyds to provide clearer and more practical information to both advisers and customers.
The approach must be extended beyond retail banks to the financial advice segment, where collaboration is just as important, especially after pension freedoms.
Richard Branson once said that ‘complexity is your enemy’ and the financial services industry would do well to remember this motto as it moves (wilfully or not) into a new era.
When paired with appropriate technology and a customer-centric attitude, the future is bright for customer experience within the financial services industry.
Joanna Hall is vice president of financial services at North Highland Consulting.
