No matter your industry, you would likely agree that customer experience can make or break your ability to win, grow, and retain business. The same is true in the increasingly competitive financial services industry. What may be quite different, though, are customer expectations from one industry to the next. While most shoppers enjoy planning for their next pursuit or purchase, they tend to approach financial services institutions with apprehension. However, we are seeing three trends that may soon change that for the better.
Mandatory disclosures, regulations preventing the use of misleading or deceptive advertising, and the Credit CARD Act aside, it’s clear to financial services companies that transparency can create longer-lasting business relationships with customers. A transactional relationship can provide a revenue stream, but within the financial services world, customers now have many more choices, so retaining and building relationships with them is increasingly important.
Bottom line is that trust is what transforms customers into advocates. Financial institutions are working hard to better understand needs and expectations by customer segments, to create easier to understand financial products and better, more intuitive interfaces.
The reward or their efforts: In an era where social and digital media enable consumers to immediately share their experiences, customers who trust their financial services providers will drive the most referrals and be more willing to consolidate their needs with a single financial services provider.
In the very early days, software products like Quicken were criticized for being too advanced for the average consumer and had too limited a market to be a worthwhile business. That turned out to be wrong. Today, the same arguments could be made about new automated financial tools like FutureAdvisor, Betterment and others. But they would also be wrong. Nowhere is it more important than in the financial services industry to empower consumers. People generally don’t like dealing with finances and software that automates common money management activities is welcomed.
While still, today, nothing beats the ability to offer consumers their interface of choice – be it online, over the phone (with a live human), or face-to-face – ease of accessibility is key. We will see the trend toward improved automation and convenience continue.
Not so long ago, if you were wealthy, white and male, with a lovely wife and your 2.3 children, the financial services industry was pretty much devoted to you. Don’t get us wrong, they still like you very much, but they are embracing new audiences to serve. This takes a serious amount of refocusing and, frankly, reinvention. But the rewards are significant for everyone.
In a recent middle-market focus group we conducted to gauge receptiveness to new products, the group expressed doubt that they would ever fully understand what was needed to make wise financial product choices. One participant summed it up, “Rich people are born knowing this stuff, for regular folks it’s very intimidating.”
Broader outreach, simpler products and increased accessibility will go a long way. Ongoing dialog to gain a better understanding of these “underserved” consumers’ needs and requirements is underway. Speed is key. Today, more than 75% of adults nearing retirement have saved less than $25,000 for retirement. And 76% of Americans say that they are living paycheck-to-paycheck. Clearly, there is more to be done to improve their financial well-being, and from our perspective here at Martino Flynn, the financial services industry is invested in accomplishing just that.
To learn more about Martino Flynn’s financial services capabilities, contact Robbie Magee at firstname.lastname@example.org.