The rate of change in the financial services industry today is reaching new heights. Business models in this sector have traditionally relied on proprietary access to data, exclusive relationships with customers and high switching costs.
Industry shifts combined with global economic disruption, however, have made these modes of operation unsustainable as consumers choose to direct their spending to businesses that best meet their expectations for high-value services
and personalized experiences.
With the confluence of five enabling trends, the financial services industry
is experiencing a wave of innovation that has the potential to redefine the
competitive landscape. To support organizational resilience in this disrupted
market, organizations must adopt a model that allows them to better understand their customers, improve data access, digitalize their processes, embrace emerging technologies and ensure all digital interactions are as secure as possible.
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Next Steps
Consumer
Choice
In today’s economy, consumers have heightened expectations for their financial services institutions
and a greater selection of companies with which to
do business. At the same time, many financial
services organizations are realizing they may not understand their customers (or their needs) as well as they should.
To maintain their competitiveness in an increasingly diversified marketplace, financial services organizations should look beyond the products and services that their customers buy and identify the underlying progress their customers are trying to make in their lives. Only then should they think critically about the types of data they gather and how they might use that data to create exceptional experiences for customers that emphasize personalized service, cutting-edge security and user-friendly functionality.
01
A greater understanding of customers depends on access to high-quality data. A heightened focus on transparency and regulation has enabled customer data to move more freely between financial institutions and to new market entrants. Open banking regulations increasingly being adopted in European countries are expected to be adopted in other countries in the future.
This will level the playing field for new entrants and incumbents alike by reducing the investment required to develop new solutions and will encourage consumers to seek out better experiences by switching institutions. Financial institutions that want to get ahead of the curve should look to create or access proprietary sources of data or generate unique insights while also mitigating the potential security risks it poses.
Data
Access
02
Along with digitalization, emerging technologies (robotic process automation, artificial intelligence,
etc.) can help financial services organizations make sense of their vast stores of data, which are useless unless they can be used to power business insights
that drive resilience. In combination with a robust digital strategy, the right technology can be a
game changer for financial institutions looking to
differentiate themselves in a field of new competitors.
Further, the strategic use of automation affords businesses the freedom to refocus talent from data harvesting and compilation to the critical capabilities of data analysis and decision support. This trend requires
leaders to invest strategically in the right technology at the right time to power their transformation efforts.
Along with increasing data access, financial
services institutions are digitalizing their processes
to create future-ready digital ecosystems that realize increased efficiencies. Organizations that have embraced cloud-enabled technology infrastructures
are breaking down data siloes to deliver more accurate, integrated data that allows for a deeper, more holistic understanding of their customers.
Adapting legacy processes or building new ones in a modern way empowers business leaders to leverage the scores of data they have to make better business decisions. It also helps to break down siloes, allowing for more seamless knowledge sharing among players
in the ecosystem. To leverage this trend to their advantage, financial services organizations should execute on a road map for regularly evaluating their processes to determine if there are opportunities for improvements that would better support a long-term digital strategy.
03
Digitilization
Emerging
Technology
As financial services organizations move to digitalize their operations and employers embrace remote work, their digital infrastructures are becoming more vulnerable.
These shifts require institutions to double down on security to build digital trust with consumers and mitigate the reputational risks often associated with breaches. By investing in security, financial services institutions foster digital trust with their constituents, which in turn will translate into customer loyalty.
05
Cyber
Security
04
Read the E-book
Read the E-book
Bill Greene
5 Financial Services Trends That Are Redefining the Competitive Landscape
01
Consumer Choice
02
Data Access
03
Digitlization
Emerging technology
04
