As the world recovers from the COVID-19 pandemic, the global financial services community can fundamentally change its way of conducting business to confront lingering concerns and growing threats.
With a better understanding of the trends that are reshaping (and will continue to reshape) the financial services industry, they strengthen their position in the marketplace, anticipate future hurdles, and contribute to positive changes in people’s lives.
Publicis Sapient, the global digital consultancy, recently published the 2022 Guide to Next for retail and banking. The full report contains valuable insights into what’s coming down the pike and how banks can thrive in the face of these changes.
The public’s expectations for financial services companies have been rising steadily in recent years. Innovative products and services from neobanks and digital transformations in other industries have raised the bar. Here are four key issues for financial services today that will only get stronger in the coming years.
Banking with purpose
With its power and influence, the financial industry has a crucial role to play in shaping the kind of society we will have in the future. With the recent shift in public consciousness toward societal issues, people increasingly want to support companies that have a positive mission — and financial services is no exception.
The banking sector is likely to continue down the path of articulating and communicating its sense of purpose to have a positive impact on the greater world. There are many ways that banks can leverage their services, assets, and talents to make people’s lives easier and contribute to global campaigns for economic inclusion and sustainability.
To fulfill expectations of inclusivity and accessibility, the financial industry must move on from generic customer journeys and start driving adaptive experiences. Banks should think about their future data needs and start capturing them now to support new ways of personalization.
The inconvenient truth is that customer journeys in finance usually are not hyper-targeted but have a superficial layer of personalization that gives the impression of being more personalized than they are. But as more banks tap into the power of customer data platforms to collect and organize data for actionable insights, they will start to arrange every step of the customer journey around his or her needs — first at the level of a customer persona and ultimately at the level of the individual. As a result, customers will enjoy better experiences every time they interact with the bank through seamless, integrated services.
The power of AI
Financial institutions will continue to use artificial intelligence and machine learning to automate backend processes, manage credit risks and reduce fraud. But the true opportunity for incumbent banks will be using AI to elevate the customer experience.
Banks will need to develop a robust AI strategy to make sure they aren’t simply automating their current processes but creating new and more effective practices within their companies. They will be able to deliver personalization at scale if they can align the workforce around data-driven decision-making and use AI to increase the organization’s resiliency and agility.
Non-banks are embedding financial products into their digital offerings, cutting into the market share that legacy banks may have taken for granted. But incumbents shouldn’t look at platform businesses exclusively as a threat. The platform business model, which is replacing standard distribution channels, facilitates exchanges and transactions between others, typically service providers and consumers.
They help users by meeting their needs and significantly reducing their transaction costs. This model contrasts with traditional linear businesses that control the development and distribution of their products or services. If established banks can successfully build platform businesses or partner with them, they will unlock new avenues of value creation and take part in writing banking’s next chapter.
You can dive deeper into these trends in the 2022 Guide to Next from Publicis Sapient.