Why It’s Time for Banks and Insurers to Take Transformation Seriously
Increased competition from FinTechs and InsurTechs, growing customer expectations, and the opportunities for growth and value creation that new financial services ecosystem will create mean BFSI organizations must digitize their businesses.
The once rather homogenous BFSI industry is transforming into a dynamic playground of new ideas and new ways to reach consumers. FinTechs and InsurTechs are rocking the boat thanks to their devotion to meeting and exceeding high customer expectations influenced by other industries such as retail, travel and electronics.
They’re redefining traditional business models and redefining the customer relationship and are doing so at a time when – despite a renewed commitment to customer experience (CX) – traditional organisations are struggling to align themselves more closely with their own customers.
“Even with disruption being felt in the industry, BFSI companies still have strengths they can draw on that the new competitors can’t,” points out John Thompson VP, Business Development, Banking, Financial Services and Insurance at Sitel Group. “They have strong, established brands, infrastructure, scale and strong embedded processes to adapt to ever changing regulations. However, too often they’re unable to deal with their data.”
The majority of established BFSI organisations are struggling with legacy systems which are too cumbersome to process the flow of data or are locking it away in silos. As a result these companies can’t tap and monetise a wealth of information that is trapped within their business.
“The effects of trapped data can be seen in BFSI CX scores,” notes Thompson. “Retail banks, for example, tend to achieve high scores for individual channels and touchpoints, but because the data is siloed within these channels, the overall CX score is low because customers and the information they provide can’t move from channel to channel. The reason why FinTechs have higher CX scores is because they have no silos and can bridge the gap between what traditional firms are offering and what today’s consumers want.”
The FinTech revolution
The amount of investment they’ve attracted and the number of customers they’re winning are both proof that FinTechs are not a flash in the pan. Thanks to the freedom that comes from having no legacy infrastructure, they can work to lower margins and compete with traditional firms on prices and fees.
They are bringing new business models and types of service into the sector, such as peer-to-peer lending and on-demand insurance, while the lack of physical branches means they have purely digital distribution models to offer consumers greater speed and efficiency.
This leveraging of digital and the corresponding data means FinTechs and InsurTechs are much more effective at personalisation. Examples include robo-advisers helping millennials design saving plans to buy a home, or InsurTech firms leveraging telematics and wearables to gain deeper customer understanding and offer advanced risk management and underwriting capabilities.
A growing financial ecosystem
“Ultimately, data is the differentiator. These companies are disrupting the market because they’re digital,” says Thompson. “Their success highlights the two things consumers increasingly want – an omni-channel experience and the ability to use financial services across multiple ecosystems, such as online and within mobile apps like social messaging, or connected car and smart home platforms.”
However, innovation will only carry a company so far. If FinTechs want to continue growing they will have to scale their operations and their systems quickly and need to be able to navigate the increasingly complex regulatory environment. This is why, increasingly FinTechs are looking to partner with established BFSI players – it’s the only way they can move further into the market.
“This need to partner is creating new opportunities for established BFSI firms to explore new business areas, create new products and services and to find greater synergies,” explains Thompson. “We’re moving towards an era of BFSI as a platform. One where there’s an ecosystem of products and services that consumers can pick and choose to meet their needs at any particular moment in time.”
However, for banks and insurance providers to profit from this platform of the future, they need to find a partner who can unlock their data from its silos first.
Time to transform
“Established organisations have to undergo a digital transformation,” warns Thompson. “That isn’t simply improving digital channels, it’s an integration of digital technology across the business. It’s an enterprise-wide undertaking, but it’s one that will boost CX, enable the unimpeded flow of data and enable you to unlock new efficiencies through everything from applying artificial intelligence to automation.”
As an organisation that has been serving the BFSI industry globally for over 30 years, Sitel Group has a suite of tools, methodologies and best practices for enabling our financial clients that are serious about transforming to become data-driven businesses.
For example, our GDPR-compliant digital platform provides a full view of each customer across each channel in real time. It supports SMS, live chat, social messaging, email and chatbots as well as traditional call centres.
“It’s best to think of it as a hub in that information from the customer feeds in and processes feed out, and vice versa,” explains Thompson; “It brings agility not simply because it allows a company to respond rapidly to a customer request, via their preferred channel, it also digitises and prioritises workflow – crucial elements for those businesses trying to update legacy systems.”
From contact centre optimisation and real-time data analytics to delivering ominchannel solutions and guiding organisations through successful digital transformations, Sitel Group has the expertise and necessary exposure to diverse stakeholders in the financial client ecosystem to help close the gap between traditional BFSI organisations and FinTechs.
If you are interested to learn what Banking Financial Services and Insurance can do to stop customers leaving, read our article on BFSI Customer Experience.