In the last few years, the finance industry has adopted digital technology, enhancing the speed and simplicity of payments and money transfers. With all the progression, there remains the challenge of improving the overall customer experience. With cybercrime only increasing and customers being far more aware of data protection, do people want to adopt a digital service that lacks human involvement?
For years, the finance industry has become more transactional. With more concern about associated fees, interest rates or rewards systems, there has been added focus on digital, particularly with the newer generation who are less inclined to visit a branch office. The continued transition toward digital has seen many branch closures and has transformed many financial activities.
According to a report by the European Central Bank, at least one bank branch is closing daily in Belgium. This rapid shift has created a society reliant on digital finance services, which will inevitably continue to increase as digital verification becomes more adopted. While there is a clear trend toward digital, customers are regularly informed about protecting their data. As a consequence, there is an issue of confidence and trust in the market fuelled by sharing information.
Reports identify that over 66% of European customers don’t know who has access to their data, and 60% of the public are concerned about the security of their online digital activities and how their purchasing data is being used and shared. The decline of humans in the financial services industry has created a gap that customers aren’t yet prepared to fill. While studies agree that technology does play an essential role in financial management, a digital-driven banking system still has a way to go. Studies indicated that 64% of customers believe the finance industry should support traditional and in-person services.
Whether it is a concern of trust or delivering more personalised service, it seems that for digital in finance to achieve its highest potential, people still require people, even if this isn’t via a high street bank.
Customers are looking for financial services to create offerings with a digital-first perspective but not take a digital-only approach, which is a positive for conventional finance. In other markets, such as retail, there is a combination of in-store experience and services with digital options for delivery choices. In the finance industry, customers are being offered chatbots to ask questions and retrieve information, which isn’t always capable of providing adequate information. It’s not necessarily a case of digital or physical, but combining options enables customers to determine how they communicate with a business.
Aside from technology and the changing demands of customers, government and industry regulations have resulted in finance businesses needing to play more of a role in meeting the financial needs of people. Data is critical for companies to improve their products and services. For example, banks have more expectancy of improving financial inclusion. A recent study suggests that seven million adults across the UK are potentially at risk of financial exclusion, meaning they lack access to mainstream financial services. This lack of availability is only rising with the continued closure of banking branches.
The positive of this situation is that the technology is available to utilise. There are companies already implementing these systems to their advantage. For example, Achmea, a leading company within the Dutch insurance market, is innovatively using technology and data to implement new services or make quick changes based on customer feedback. Recent developments such as using drones to survey weather damage to properties and an app to find local tradespeople for repairs have been introduced to enhance their service.
Customers want a secure and straightforward financial service with complete confidence in how their data is collected, stored and used. For an industry focused on numbers, people don’t want to be considered as just another figure. The financial services industry has an opportunity to demonstrate how digital data services can benefit customers, connect communities and transform the entire industry.
