By Jikku Joseph
The more connected we are, the more disconnected we sometimes feel – especially when we’re dealing with faceless companies like banks and other financial institutions. A digital world can be cold, but it doesn’t have to be. One way to warm up your service offering is to use technology to treat customers like people again.
Innovation in the financial services sector is at an all-time high. “Fintech” is the buzzword on everyone’s lips, whether you’re a developer at a start-up or an executive at one of the major banks. As a result, the industry is experiencing unprecedented progress.
It’s all very exciting, but one of the side-effects of progress is increased complexity and a baffling array of choice. Customers are being bombarded with new products on a daily basis – by their own bank, and by external disruptors. But how many of these products are relevant to the customer, and how many just add to the digital noise?
At the same time, customers are becoming distanced from their financial service providers. When was the last time you went into a bank and spoke to a human teller? Some banks don’t even offer that option anymore – digital-only Bank Zero is South Africa’s case in point. Payments, too, although safer, are becoming less personal. A Mastercard survey showed that contactless payments – using services like tap-to-pay and scan-to-pay – jumped by 40% in early 2020 when the Covid pandemic forced people to think about what they touch.
Interaction is still possible
How does one build brand loyalty when we’re operating in this kind of environment? The answer is not to dial down the tech, but rather to embrace it in a human way by engineering engagement. Corporates have to show customers that they’ve taken the time to get to know them and their financial requirements, and they’ve worked out exactly what will make their lives easier.
Of course, this is easier said than done, and it’s often the smaller, more nimble financial companies who are able to adopt engagement more readily. Internationally, boutique banks like Origin in the US are offering customers more than just standard online transaction tools. Their mobile app gives customers a holistic view of their finances using a simple, graphic interface (Origin accounts as well as third-party investments), which helps customers budget better and manage debt.
Good local examples in the insurance space are Pineapple and Naked Insurance, which were launched a few years ago and have been growing exponentially ever since. By using artificial intelligence (AI) to do away with costly and complex call centres and brokerages, and by offering a fully automated self-service system that is transparent and easy to use, they can offer much lower premiums than established insurers. Their apps encourage engagement – it’s up to you to control what is insured and for how much – which puts the customer in control and builds brand loyalty.
Knowledge is profit
If you can engage with customers at a personal level, there’s far less chance of them switching service providers. But engagement also has a very valuable side benefit: it’s one of the best ways to gain customer intelligence.
According to a recent report from PricewaterhouseCoopers (PwC), customer intelligence will be the most important predictor of revenue growth and profitability for financial institutions going forward. The report states: “We will see a divergence between companies who use data to their advantage and those who do not. The winners will be able to price products based on a deeper understanding of risk; the losers will merely compete on price.”
This is the genius of building value-adding engagement into your brand. Instead of trying to harvest data from surveys and third-party sources, your customers will willingly share their data. This gives you the information you need to build better products and the ability to develop insights to offer those products to the customers that actually need them. Happy customers are loyal customers, and loyalty in an impersonal digital landscape is one of the most powerful ways to differentiate your brand.
*Joseph is MD of budgeting app 22seven.
**The views expressed here are not necessarily those of IOL or of title sites.
BUSINESS REPORT ONLINE