The financial services industry (FSI) is at an inflection point today. While it has traditionally been product-centric, focusing on optimizing products and services to maximize profitability, this approach no longer adequately meets Customer needs. In response, FSIs must shift their focus from Product to Customer by beginning with understanding their pain points and working back. As such, instituting a customer-centric mindset throughout operations will help create meaningful experiences and result in better products & services for both customers and institutions. This blog post explains how customer-centricity can benefit FSIs across different touchpoints along the journey – enabling them to build trustworthiness while increasing success metrics like satisfaction scores and share of wallet.
A Strategic Shift from Product Focus to Customer Focus
One of the common tenets in Financial Services firms is always to keep their customer in mind, which acts as a North Star. Becoming customer-focused, however, requires more than just having that philosophy; it necessitates a strategic shift from a product focus to a customer focus. First, financial services companies must examine their customers’ pain points and then build solutions based on what they uncover. Of course, it is foolhardy to implement solutions before genuinely understanding their consumers’ perspectives. However, designing products in response to a customer need can lead to improved loyalty and satisfaction leading to positive long-term returns for businesses.
Understanding the Customer’s Needs and Pain Points
Understanding the customer’s needs and pain points is critical for financial service firms transitioning from product to customer focus. With customers at the center of business strategy, financial service firms have an opportunity to develop products and services that reduce customers’ pain points and create a better user experience. This requires a deep understanding of customers, their preferences, and how they interact with financial services. In addition, companies should take proactive steps such as designing ongoing feedback mechanisms to collect data, analytics processing to enable better insights, and continual updates of existing processes to understand customers’ needs to stay ahead of the markets. Only by being aware of the customer perspective will financial service firms be able to develop solutions that respond directly to individual tastes, demands, and needs.
Designing products and services as Painkillers to customer problems
Customer experience must be at the forefront of any successful financial services business. Firms must now shift away from product-based approaches and instead focus on identifying and solving customer pain points. This requires building products and services designed as a ‘painkiller’ to existing customer problems. Emphasizing the customer’s needs leads to more robust engagement between the firm and its customers, allowing them to deliver experiences that ultimately increase trust in their brand. Designing painkillers will enable firms to stand out from competitors, create value for customers, drive long-term loyalty, break down silos within the organization, and more importantly build trust with their clients – critical in such a highly regulated market.
The financial services industry is evolving toward customer focus, intending to build innovative products and services to address customers’ pain points. Paradoxically, this is often easier said than done due to the complexity associated with understanding customer needs, interpreting existing regulations, and transitioning existing infrastructure into client-centric systems. Therefore, firms must invest in technologies that make customer engagement quicker and more effective while developing competencies in data-driven design processes and microservices-based architectures. In addition, they must remain agile by scheduling regular meetings with customers to receive feedback on their product roadmap and any new features or updates implemented since the last engagement. Finally, financial service firms can stay competitive through these strategic efforts by creating innovative products and services tailored to customer needs.
Leveraging Technology to drive Shorten Product Development Life Cycle and foster Faster Iterations
Leveraging Technology is seen as increasingly important for financial services firms looking to reduce their product development life cycle, allowing them to foster faster iterations. While many view technology as reaching the limits of its digital capabilities, this is not the case in product development within Financial Services. With powerful algorithms and analytics at hand, organizations have a much better chance to quickly identify the customer’s pain points and adjust their products accordingly. To take full advantage of this Technology, financial services organizations must develop a framework that puts the customer at its core and helps identify what customers need and wants regarding products. Thus, Technology provides an excellent opportunity for Financial Services Organizations to shorten product development life cycles and foster faster iterations by putting the customer at the center of all decisions.
Implementing Data-Driven Strategies for Personalization and Customization
Financial service firms must employ data-driven strategies to personalize and customize the customer experience to emphasize customer satisfaction and differentiate their brand. By leveraging analytics and insights into customer behavior, banking institutions can create hyper-targeted experiences based on individual needs, preferences, and goals. Utilizing techniques such as segmentation, predictive analysis, profiling, machine learning, and artificial intelligence allows an organization to anticipate its customers’ wants before they are expressed or even recognized by the customer – ultimately leading to true one-to-one personalization.
With the ever-evolving technology landscape and increased access to mobile devices, embracing a mobile-first product ethos is vital for financial services. Organizations can develop tailored experiences customized to meet users’ needs and expectations by focusing on customer pain points rather than just product solutions.
Establishing Trust with Customers Through Transparency and Security
To establish trust with customers, financial services firms must go beyond excellent service and consider the security of their customer’s data. Financial services firms can ensure that customers feel safe when sharing their data by instituting secure data protection protocols and transparency throughout the customer journey. In addition, financial services firms can build greater trust and security between themselves and their customers by taking proactive steps to protect customer information and make it clear where it is stored and who has access to it. In an age of increased cyber-attacks, companies must prioritize safety to remain reliable in the eyes of their customers.
Financial services firms must strive to make customers the north star of their business operations. By understanding customer needs and pain points, innovators can develop products and services that act as “painkillers,”; all while leveraging the use of Technology to drive shorter product development cycles and quicker iterations. Additionally, companies should embrace a mobile-first ethos, considering the expectations of customers who prefer on-the-go convenience. And finally, companies should never forget that establishing customer trust is paramount. These seven steps could be instrumental in creating a successful long-term plan for financial service organizations when it comes to viewing customers as an integral part of the process – crucial for success now more so than ever before.