The Growing Demand for Customer-Centric Experiences

Predicting Future Customer Needs

Customers today are dealing with a complex world of information. Inescapable advertising competes for their attention, endless decisions and distractions overwhelm, and patience for irrelevancy and unnecessary steps dwindles in their effort to cope with a fast-paced society.

For these reasons, businesses that offer only relevant and timely information and efficient experiences may be seen as heroic. Spotify, for example, uses algorithms to offer music playlist suggestions based on your preferences, while Netflix gives you on-demand access to entertainment. Uber also focuses on a customer-centric experience by giving you the location of your driver on a map, time until pick-up, and convenience of app-based ordering without the awkwardness and hassle of payment at the end of the ride.

These models influence customer expectations, and are creating a demand for personalized, efficient experiences in other industries, including financial services. According to a 2016 survey by Oracle, 80 percent of financial executives have experienced a trend of customers looking for more individualized experiences; an opportunity that they estimate could lead to 14 percent revenue growth.

The above insights suggest that customers in the future will demand seamless, efficient, useful, and relevant financial services. These needs may be met by the following strategic offerings that are emerging.

1. Personal financial tools

With the advent of health trackers, such as the FitBit that tracks sleep and physical activity, there has been a shift towards offering financial apps and tracking tools to give customers personal and helpful financial information. These tools are independently owned, such as Mint, or linked to a financial institution, such as BMO’s MoneyLogic tool that allows you to monitor your spending habits. PNC’s Virtual Wallet helps you manage and simplify your finances under the categories of Spend, Reserve, and Growth. These types of tools ideally offer real-time synchronization, so that spending information is kept up-to-date and can be viewed on demand. And if tracking your own finances is too much of a burden, there are signs that 24/7 virtual personal assistants with the ability to anticipate your needs are in the works.

2. Seamless customer journey

Navigating financial services has traditionally been confusing. From looking for the right product, applying for it, waiting for approval, searching for advice, and seeking to understand fees, the customer journey can be filled with uncertainty and stress. Therefore, financial institutions that make their experiences comfortable and customized stand out. Technological advances, such as behavioral data tracking to predict product needs, are enabling the development of customer-centric experiences to meet customer expectations. Other technological solutions include improving approval time, instant transactions and synchronization, ability to view an application status digitally, omni-channel support, event-driven promotions, and video advice content.

3. Build-your-own banking platform

Customers are diverse: some prefer in-branch appointments with advisors, while others want to manage their finances on their own using digital tools. Fintech, a term used to identify innovative external financial technology players (i.e., Apple Pay, the Lending Club, and PayPal), offers alternative services to customers whose needs may not be completely fulfilled by their financial institution. According to a Financial Brand article on 2016 banking trends and predictions, it is likely that financial institutions will partner with fintech companies to complement each other’s strengths and weaknesses (i.e., trust, innovation, technology, and customer base) and develop banking platforms. In fact, some deals have already taken place, such as JPMorgan Chase’s partnership with OnDeck to create an online small business loan platform. Combined with the demand for customized experiences, a build-your-own banking experience, where customers select their ideal channels, products, charitable donations, and tools, may also emerge.

There have been shifts in financial services to meet increasing demand for customer-centric experiences, seen through the development of personal finance tools, improvements in the customer journey, and partnerships formed to create banking platforms. This progress is impressive, however, there is still a large gap between what customers expect and what is currently available. Approximately 71 percent of financial executives state that the shift towards individualized experiences is a growing challenge in their ability to compete effectively, and only 17 percent give their organization an “A” score in meeting individual needs. As other industries continue to leverage new technology to offer better experiences, customization in finance will likely grow into a key customer need in the future. Customer-centric experiences will represent a great opportunity for business growth if financial institutions can innovate along with it.