Investing for the future: Reinventing the financial customer experience

Discerning consumers are demanding more from their financial institutions, particularly the range of services available, access points to services, and improved customer experiences. In response, the financial services sector is investing heavily in innovation to meet this emerging demand.

Across the region, consumers show a strong propensity to save and invest for the future. In fact, Asia-Pacific consumers are more focused than any other region globally on saving for the future, with 67 percent putting spare cash into savings and 38 percent investing in stocks and mutual funds.*

In a region ripe with new investors, newly acquired wealth, and a burgeoning middle class looking to tap into banking and finance products, competition in the financial services sector has ramped up significantly in recent years.

Fragmentation in the industry is accelerating, with more channels to engage with providers, such as branches, ATMs and Relationship Managers, and most recently the onset of digital banking is making it easier for financial institutions to reach consumers. Increasing wealth across the region is also giving rise to multi-banking behaviour, where consumers are engaging with multiple providers to address their various needs. As the financial services sector collides with Asia’s new consumer class, the key challenge for the industry centres around customer acquisition and retention.

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With so much competition, establishing and growing brand equity is a core focus for financial services companies operating in Asia Pacific. Differentiation is key, and is largely underpinned by understanding customer needs, establishing customer engagement, and developing the right solutions at the right time. Servicing is also critical for success for providers in the financial services sector. Interestingly, community engagement is also a key factor, and customers are increasingly looking for brands that are visibly contributing to the communities in which they operate. The importance of these emotional factors has increased notably and cannot be overlooked. When it comes to brand marketing, these trends make it important for providers to take a holistic approach, balancing product-centric advertising with emotion and benefits-driven messaging. And with such a diverse population, providers must also look for new and different channels to engage with disparate customers across age, culture and demographics.

Without doubt, the single biggest opportunity for the financial services sector moving forward is digitisation. Technology such as the internet and, in particular, connected devices, continues to transform the way we bank, and it will play a significant role in shaping the future of the financial services sector. Online and mobile platforms are becoming a preferred channel for customers to access financial products and services and, combined with the emergence of digital innovation, will continue to support another wave of financial services innovation. More and more banking and financial institutes are investing in the creation of ‘omnichannels’, where customers will have a seamless experience whether they connect with their provider via the internet, smartphone, tablet, branch, call centre or ATM, and whether for transactions, balance or payment/deposit information or to apply for a new product or service. It is important, however, that these providers understand which activities customers are looking to tap into on which platform or through which channel.

Another area shaping the future of the financial services sector is the reinvention of customer servicing. Customers are more demanding than ever when it comes to the level of service they receive and their overall banking experience – and they’re increasingly sharing these experiences with others via social networks. With rising expectations and social networking gaining ever more traction, banking and financial institutions must develop customer management strategies which meet and exceed customers’ expectations.

Investing in product development and innovation is important for future success, in order to reach new segments and attract new customers to the brand. One such category is retirement solutions, and there is a huge opportunity to improve on the range of services available to the region’s aging population. Similarly, opportunities abound in the insurance segment, with penetration of insurance remaining relatively low in Asia.

Underlying all of these opportunity areas, in order to succeed now and into the future, banking and finance companies must invest in gaining an in-depth understanding of the motivators, drivers and banking habits of consumers and how best to build a lasting connection.

* Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q1 2014

Oliver Rust (pictured) is senior vice-president of global financial services at Nielsen