Andrew Curry writes: I was invited to contribute to a conference panel recently on the future of Operations and Technology in Financial Services. Here are some of the things I learned during the course of the event, which was organised by Marketforce.
- The legacy technology of the typical financial services company is a significant barrier to innovation. Tim Skates of RSA argued that with 40 billion projected devices projected for 2020,and data volumes continuing to explode, the sector winners will be the ones who run their technology systems in the best way. Skates sees a whole host of customer benefits in predictive analytics – shifting the business from segmentation to personalisation, moving from insurance policy to relationship and from claim to prevention – but the current technology systems are getting in the way. The question for CIOs: “Can I salvage anything from the spaghetti, or should I say, Let’s not bother?”.
- Customer expectations have outstripped the industry’s ability to deliver. Steve Knight, the Chief Operating Officer of LV=, said that customers are time-poor and expect their business with you to be “complete at first contact.” And contrary to some of the industry received wisdom, he argued that the regulations don’t get in the way of clear language and clear processes. Knight – in the best speech of the day – was long on the importance of trusting your front line staff and short with a questioner who asked him how he motivated call centre staff. “We don’t call them call centre staff for a start,” he replied. “These are the people who own our customer experience.”
- Anne MacRae, the head of Financial Services at Fujitsu, shared some research which Fujitsu had carried out with IT decision-makers in the sector across the UK and Ireland. Although 18-24 year olds are the biggest users of mobile financial services such as Pingit, and she and other speakers had talked about how fast the web was becoming a mobile phenomenon, almost half – 44% – of decision makers say that don’t have a strategy in place for mobile. As McRae said, the result is that they “become less relevant for future generations.”
- Bridgid Whoriskey, Head of Research and Innovation at RBS, argued that “We used to be more or less in charge, and we’d let our customers do things.” Now, in contrast, the age of the customer had arrived. But the banks were responding more slowly than new competitors. There’s been an explosion in non-bank payment services, and in peer-to-peer savings and lending businesses. The result: “the banking ecosystem is being split apart” as these new players “are nibbling at our lunch.”
From the outside the financial services company appears locked in by regulations and technology, and by short-term business cultures. In my research for the panel discussion, I found a quote from one observer suggesting that “bank brands are undesirable and undifferentiated” – while the growth of price-driven intermediaries suggests that insurance company brands are mostly undifferentiated. Despite this they seem poor at learning from other sectors.
But there’s little stopping them from re-imagining and re-inventing their customer journeys. So much of what financial services businesses do is digitally enabled – moving money, moving documents – that they should be able to build a future-facing version of what they do that focuses more on the high value moments for the consumer and less on hiding value from them. This may well come wrapped around with human service elements, on the phone or even in branches.
Someone will succeed in this, But right now it looks more likely to be a challenger than one of the large incumbents.
The image at the top of the post is from Wikimedia and is used with thanks. To learn more about The Futures Company’s perspectives on the financial services sector, please contact Jo Phillips or Andrew Curry.