All things digital continue to dominate the financial services industry with increasing investment in new technology and innovation across a host of platforms. But we’re not there yet. Here we highlight a few key facts and stats that paint a picture of the work left to do.
The financial services industry is ill-prepared for its ongoing digital transformation
Financial services brands continue to lag behind most other industries when it comes to embracing digital. The 2016 Digital Business Global Executive Study and Research Project suggests that the industry is still struggling to embrace its digital transformation. 90% of those surveyed strongly agreed that digital technologies are disrupting the industry but only 46% of respondents believed that their firms are adequately preparing for that disruption. At only a 2% increase on the year before, this suggests too little is being done to bring them up to speed despite awareness of the need.
Spend in digital engagement continues to grow but finance industry is lagging
Digital media remains the key growth driver across global advertising according to a forecast by GroupM, taking $0.72 of each ad dollar, with an expected increase to $0.77 through 2017.
Financial services spent the third largest amount on digital advertising in the US of any industry in 2015, behind retail and automotive according to a report by eMarketer. The expectation is it will stay in 3rd position until at least 2020, with the financial services’ expected growth in spend below the industry average. Consumer packaged goods (CPG) and healthcare and pharma are making up the difference.
Banks need to balance the older generations’ preference for in-person interactions with the younger demographic’s digital fluency
Customer loyalty is key to growth
According to a report published by Accenture Global in July 2015, “customers are buying, but less so from current providers. Globally, 27% of bank customers purchased/subscribed to a new financial product/service over the last six months. However, more and more consumers intend to buy less from their current providers.”
With the influx of new, agile players on the market, today’s customer does not view changing provider as a chore and will switch more frequently if the offer is good. 80% of customers who switched providers stated that it was due to poor service, while 61% of banking customers said they expect to have more online interactions through digital services.
Customers want a better digital experience but brands are slow to pivot
With 67% of millennials using mobile banking compared to only 18% of those aged 60+ (US Federal Reserve study), banks must adapt their business models to this shift in user behaviour. Banks need to balance the older generations’ preference for in-person interactions with the younger demographic’s digital fluency. According to a report by The Financial Brand however, only 37% of organisations have a formal customer experience plan, with technology still mistakenly viewed as a lower priority driver of customer satisfaction.
Social media is a key tool for data-driven marketing
The finance industry has always used data to better understand their customers however the level of information now available is at an all-time high. This does have negative connotations however.
A survey by consultancy EY found that 78% of respondents believed that companies used their data to make more money. However another EY survey found that around half of more digitally savvy customers were happy to share additional personal data in exchange for more favourable offers such as cash benefits, discounts or loyalty rewards. Social media is more than a communications device; it is also a key tool for customer data collection, bridging demographic gaps across age, education, shopping habits etc. Data collection combined with analytics and customer segmentation is crucial to ensure companies are future-proofing their brand’s marketing.
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