Redefining exceptional experiences in financial services.

Until a decade ago, a good customer experience in financial services depended mostly on the person providing it. Firms relied on bankers, agents, and advisors to establish and deepen the personal relationships that build and maintain trust. But by late 2015, nearly four in 10 Americans hadn’t visited a bank or credit union branch in six months, according to Sheyna Steiner at Bankrate.com. As early as 2012, McKinsey reported that 28 percent of personal auto insurance customers worked directly with the carrier, bypassing agents. And the response to recent attrition among financial advisors has included automated advice and algorithm-based portfolio management, according to PricewaterhouseCoopers.

Financial services continue to be delivered in new and unexpected ways. Digital is the new personal, the best service starts with self-service, and continuous innovation — not just improvement — defines exceptional experiences. Consider just three examples:

UK bank start-up Mondo Bank raised over £1m (about US$1.3 million) in less than two minutes with a crowdfunding campaign aimed at building “a bank that’s as smart as your phone,” according to Patricio Robles’s 2016 blog post for Econsultancy.

Chicago-based SnapSheet provides a mobile app that guides auto-insurance customers through photo and information-gathering after an accident, Michael Hinshaw at CustomerThink reported.

Investment newcomer Betterment has led the shift to robo-advisors, which help clients make stock picks based on algorithms without the expense of human advisors.

Companies like these are transforming customer experience at a time when most financial firms still wait and see if frontrunners’ innovations meet with success. But that approach ignores customers’ heightened and changing expectations. Safety, security, transparency, and trust are now the price of entry, according to The Financial Brand. And Deloitte says that many customers, especially the 40 percent of global population under 35, prefer to avoid human interaction unless absolutely necessary.

Customers increasingly want digital financial services.
Consumers are eager to digitize, according to the 2017 ADI U.S. Finance Survey:

Customers want digital financial services infographic 1.

Of financial planning takes place online.

Customers want digital financial services infographic 2.

Spent less time managing finances this year than last, thanks to smartphones and mobile apps that support on-the-go tasking.

Customers want digital financial services infographic 3.
Customers want digital financial services infographic 4.

58% of millennials and 62% of Gen Xers perform financial planning online, indicating the digital appeal is on the rise.

That means transforming customer experiences in financial services depends on regular digital engagement across channels on par with brands like Apple, Amazon, and Starbucks. These digital experiences must be simple, personal, valuable, consistent, and connected. Products and services exist to eliminate pain points that frustrate customers and waste time and money — in other words, to make their experiences better.

The payoff? Higher revenues, according to the Forrester “Brief: CX Drives Revenue Growth in the U.S. Auto Insurance Industry.” But that’s true only when firms shift focus from internal benefits like selling and cost-cutting to customer benefits like ease and responsiveness.

To find out where financial services firms are in their digital transformations and how that impacts customer experience, Econsultancy and Adobe surveyed more than 400 banking, insurance, and investment company executives as part of our “State of Digital Transformation in Financial Services" 2017 Study. We also looked at other research, including the 2017 ADI U.S. Finance Survey and PricewaterhouseCooper’s survey on fintech and emerging technology impact on financial services. Here’s what we learned and how you can use it to improve your customer experiences.

Digital is the new personal.

Exceptional experiences in FSI image 1.

Regardless of the financial services industry, a great customer experience connects content across channels for consistency and continual personalization. But without a digital foundation, firms can’t track how customers engage across branches and channels or access data to give customers an experience relevant to them. Digital leaders understand that to connect with customers across channels and, more importantly, with their brand, they need a platform to efficiently manage content, unify data, and automate testing and optimization.

For now, retail banking’s highest priority is growing the client base, according to the “Digital Transformation” survey. Insurance and investment firms focus more on retention. But for each, providing consistent, high-quality customer experiences ranks second across the board. They’re positioned differently to make that happen, however.

Retail banks often interact with consumers daily via apps and websites. These frequent touchpoints provide opportunities to deepen the relationship. For example, a top Asian consumer bank held a large market share but fell behind in products per customer, according to McKinsey & Company. The bank used advanced analytics to explore big data sets including demographics, products held, and credit-card statements. By identifying similarities among customers, the bank defined 15,000 microsegments. Their model of the next product to buy for each segment increased purchase likelihood threefold.

Retail bank loyalty drops across the ages.
What customers expect from their banking customer experience varies depending on demographic, according to the 2017 ADI U.S. Finance Survey:

Retail bank loyalty infographic.

Upgrading touchpoint experiences is only the start; you need to consider the entire journey to avoid a disconnect between email and app and branch. Automation provides an untapped opportunity to delight customers with tailored offers and messages at every turn. Artificial intelligence (AI) supports these efforts by integrating data and science to provide insights, support segmentation, and improve personalization. Compared to insurance and investment firms, retail bankers have begun to apply AI to their customer-facing areas at more than twice the rate, according to our “Digital Transformation Study.” 

In contrast to retail banking, the insurance sector doesn’t enjoy the benefit of repeated customer touches. Insurance firms have historically interacted with customers only when something bad happens. Even if consumers sign up for insurance on a website or app, they generally don’t return. That makes deepening relationships and cross-selling a challenge. And the insurance sector faces stringent regulation, making the few who call themselves digital disruptors in our “Digital Transformation Study” a bold group.

Established insurance companies use their widespread operations, financial and personnel resources, and extensive data to better serve customers. But ultimately it’s digital innovation that drives value and solves problems. Examples include offering insurance based on data on driving habits and mobile claims that prove faster and easier for adjusters too. 

Investment firm customers also visit websites infrequently. Barely half of respondents to the ADI U.S. Finance Survey reported managing retirement accounts online, while far more checked bank balances, prepared taxes, or applied for credit cards. But consumers do want to know what’s happening in the market, opening a door for new services and positive experiences. And that door opens even wider for younger consumers: Those 18–34 find trading stocks and bonds, and managing retirement accounts, easy or very easy via apps, according to Deloitte.

The best service starts with self-service.

Exceptional experiences in FSI image 2.

Digital disruption creates opportunities that may be seen as threats by those not ready to take advantage of them. Chief among leaders’ concerns is the inability to appeal to new generations who have different expectations about user experience, according to our “Digital Transformation Study.” Especially for millennials and younger, the best way to show that you value their time and money is to not waste it.

Fintechs bring disruption and dismay to financial services.
Even though fintechs claim only a small portion of financial services business now, they worry the big players, according to a PricewaterhouseCooper poll of 1,300 financial services executives:

Effects of fintechs on FSI infographic 1.

Of financial services firms’ revenue could be lost to fintechs in the next three to five years.

Effects of fintechs on FSI infographic 2.

Believe their business is at risk to innovators.

Effects of fintechs on FSI infographic 3.

Have put disruption at the heart of their strategy.

Effects of fintechs on FSI infographic 4.

Expect to increase fintech collaborations and acquisitions.

Cutting-edge offerings from fintechs may also explain why digital leaders are more concerned than followers about falling demand for products and services due to changing consumer habits. Chief among these habits is younger consumers’ preference for the do-it-yourself approach. Retail bankers, in particular, find that these customers choose app-driven and automated interactions. 

If you take a task, remove steps, reduce friction, lower costs, and make it mobile, you’ll improve the younger generation’s experiences. This is where the fintechs excel. They focus on a segment of the financial services market, differentiate by building a better experience, and then move nimbly. But even established firms can mimic this approach. 

Retail banks have been forced to adapt more quickly to digitally driven change due to the faster speed of disruption. Challenger banks including Moven and Atom all cater to consumer desire to bank almost exclusively through smartphones, according to Econsultancy and Adobe’s “Digital Transformation” report. 

This trend hasn’t escaped traditional retail banks with huge brick-and-mortar operations. They’ve responded with excellent smartphone apps, which support self-service for users and help slow the stream of customers leaving for new entries. Still, 57 percent of millennials would switch banks for a better technology platform, according to Deloitte.

Insurance firms trail retail banking and less-regulated sectors in digital transformation, although the pace of change is increasing. One of the most significant trends is the shift from pooling and pricing risk using historical data. Innovative insurance schemes include cheaper policies for those monitoring their health via devices such as the Apple Watch or their driving behavior via telematics. The greatest opportunity comes from offering a customer experience that’s more integrated and personalized than competitors — and it can be as simple as pre-filling as much information as possible in online forms customers use to file claims. 

Leading investment firms use digital to deliver a truly integrated customer experience across channels. Communications across instant messaging, video chat, social media, and shared browsing enable investors to interact with their wealth advisors how and when they choose, tandemseven reports. And firms like Merrill Lynch are offering a full client experience from self-service mobile apps for guidance and insight to active advisory services. 

Fintech upstarts in wealth management are exploiting increased consumer sophistication and decreased trust of large providers to create better-priced offerings, according to Patricio Robles for Econsultancy. Financial advisors, in particular, have come under fire for charging fees that skeptics say are unjustified. Even established firms like Charles Schwab are following fintechs’ lead in offering robo-advisors as an automated, lower-priced alternative. 

Continuous innovation defines exceptional experiences.

Exceptional experiences in FSI image 3.

Even long-standing financial services firms are taking customer experience cues from fintechs and other innovators. To compete, financial services firms should consider implementing the steps below, according to the “Digital Transformation” report:

  • Move the focus of digital engagement from cutting costs to enhancing experiences. Reducing expense to service customers pays off only if you improve bank customer experience simultaneously.
  • Invest in advanced analytics, targeting, and experience management tools. That’s how you’ll deliver powerful, personal, secure experiences in real time and at scale.
  • Allow your customers to engage with your firm on the channels, at the times, and in the ways they prefer. That’s likely to be on mobile, anytime, anywhere.
  • Transition advisory and sales activities from reactive to proactive. Use artificial intelligence to know what your customers want before they do.
  • Engage with your customers throughout their journey, from shopping to account opening to onboarding to expanding your relationship.
  • Continuous innovation requires new tools along with new processes. Those listed here are trending among digital disruptors, according to the “Digital Transformation” report:
  • Mobile wallets and payments: An explosion of easy-to-use apps, most notably from PayPal and its subsidiary Venmo, has outpaced traditional players. But America’s Big Four (JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup) are catching up with mobile wallet and peer-to-peer payments.
  • Financial management apps and tools: In a world where consumers value self-service more than individual brands, this is a route to customer loyalty and up-selling of services.
  • Data sharing and management: There’s no reason to go it alone when you’re reinventing your customer experience. Add value to your relationships and bottom line by working with complementary brands and services. For example, Progressive counts on telematics startup Zubie to provide driving distance and habit data that can lower premiums.

Digital disruptors rank their organization’s top priorities for innovation.

Top priorities for FSI disruptors infographic.

Leaders understand that the digital experiences they offer consumers define their brand and set it apart from the competition. A simple, personal, and valuable experience is up for grabs, and it strengthens the relationship between your brand and your customers when you get it right.


“2016 Wealth Management Trends,” PricewaterhouseCoopers, 2016. https://www.strategyand.pwc.com/trends/2016-wealth-management-trends

“ADI U.S. Finance Survey 2017,” Adobe, 2017.

Amit Garg, David Grande, Gloria Miranda, et al., “Analytics in Banking: Time to Realize the Value,” McKinsey & Company, April 2017.

Daniel Kobler, Felix Hauber, and Benjamin Ernst, “Millennials and Wealth Management,” Deloitte. https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/financial-services/lu-millennials-wealth-management-trends-challenges-new-clientele-0106205.pdf

Harley Manning, “Brief: CX Drives Revenue Growth in the U.S. Auto Insurance Industry,” Forrester, February 10, 2016.

Jim Marous, “Banking Needs a Customer Experience Wake-Up Call,” The Financial Brand, February 6, 2017. https://thefinancialbrand.com/63654/banking-customer-experience-research-survey/

Michael Hinshaw, “Insurance Customer Experience Innovation: 5 Disruptive Examples,” CustomerThink, February 17, 2016. http://customerthink.com/insurance-customer-experience-innovation-5-disruptive-examples/

Michelle Palomera, “How to Digitally Transform the Wealth Management Experience,” tandemseven. http://www.tandemseven.com/digital-strategy/transform-wealth-management-experience/

The Millennial Disruption Index, Scratch, 2014. http://www.millennialdisruptionindex.com/wp-content/uploads/2014/02/MDI_Final.pdf

Patricio Robles, “Could Established Financial Services Firms Lose a Quarter of Their Revenue to Fintechs?,” Econsultancy, April 11, 2017. https://econsultancy.com/blog/68981-could-established-financial-services-firms-lose-a-quarter-of-their-revenue-to-fintechs/

Patricio Robles, “Five Ways Fintech Upstarts Are Disrupting Established Financial Institutions,” Econsultancy, August 8, 2016. https://econsultancy.com/blog/68159-five-ways-fintech-upstarts-are-disrupting-established-financial-institutions/

Sheyna Steiner, “Branch Banking Still Popular with Americans,” Bankrate.com, December 21, 2015. http://www.bankrate.com/finance/consumer-index/branch-banking-still-strong-among-americans.aspx

“State of Digital Transformation in Financial Services,” Econsultancy and Adobe, 2017.

“Winning Share and Customer Loyalty in Auto Insurance,” Insights from McKinsey’s 2012 Auto Insurance Customer Insights Research, 2012.