The Customer Communications Challenge For Financial Services Companies

The Customer Communications Challenge For Financial Services Companies

The financial services sector has seen some of the most radical shifts in customer perception and engagement over the past few years. From physical statements in envelopes and long queues at counters, today nearly any banking and financial task can be done from just a smartphone app by users from anywhere in the world.

Technology transformed the finance sector from one which focused on customers interacting with a financial service to one which centers finance around a customer’s choices. The emergence of any-branch operations and computer-controlled customer communication management had delivered a massive gain in efficiency for the operations of financial service companies that had taken the plunge. However, with time, these systems have also become merely par for the course.

Customers today are more demanding than ever. They seek personalized experiences and convenience for their financial needs.

Legacy CRM systems relied on batch processing for the financial products offered for end customers. This falls foul of the modern-day digital-first mindset of customers who want their financial management and communication to be real-time, intuitive, and convenient.

Rising customer expectations have created a new set of challenges for financial services companies. Their biggest question is, how to create a comprehensive customer communication strategy and medium?

Here are 5 challenges they face on that path

  1. Proliferation of digital channels

    Undoubtedly the biggest challenge for financial services is to relay confidential financial information across a bevy of channels. Customer preferences include the most basic channels like SMS and Email to even social media and instant messaging like WhatsApp. Customers can reach out to financial service organizations for various needs over any medium. And they expect responses in a medium that is most convenient for them at the moment. It could be a simple message via Facebook Messenger or a chat in WhatsApp or an IVR operated contact number for telephonic conversations. Customers demand convenience more than anything else and this makes the channel selection and adoption task super-hard for financial services companies.
  2. Engagement Quality

    A bigger challenge posed by the rising number of customer communication channels for financial services is maintaining the quality and consistency of the communication. For example, a customer reaching out to the company to help with a financial product or service via telephone might enquire about an update to their query through WhatsApp or email the next time rather than calling from the same telephone number. For service providers, this creates a need to holistically make available the requisite information across agents or systems handling customer communication across each touchpoint. Merely a phone number, account number, or customer ID should be sufficient for the entire (and accurate) case history or inquiry proceedings to become available across any of the company’s official customer contact points. This is a substantial data integration challenge. It is an even bigger challenge of digitizing customer service workflows.
  3. Security Threats

    As customers become increasingly dependent on digital, there is growing concern among business leaders about cyber threats and their potential impact. Obviously, for the financial sector, cybersecurity is of prime importance. Any compromise in security will result in impacts on actual monetary transactions of customers. Penalties and legal lawsuits over data loss and data integrity assurance may hit even the most established firms hard. What this means for customer communication channels is a tremendous focus on securing data in transit. Financial services firms also need to enable high-end security systems to ensure that confidential information is secured, encrypted, and made accessible only to authentic customer touchpoints.

  4. Compliance and Regulations

    There’s no doubt that compliance and regulatory concerns are one of the biggest challenges for any financial services firm. Since they manage or advise on people’s personal revenue streams, there are umpteen policies with regards to reporting, validating, and authenticating transactions as well as in conducting business operations. Manual inspection and validation of all tasks in line with compliance norms will be a monumental task for firms and, almost certainly, a bridge too far. Making the compliance task (like KYC documentation) too onerous for the customers will also drive them away. And in this boundaryless age, the diversity in compliance norms with regards to countries, zones, operating systems of smartphones and wearables will only create new challenges. Customer communications must not fall foul of any regulations anywhere at any time.

  5. Intuitive Marketing

    For most financial services, the concept of personalized marketing promises much. The growth of technology-driven approaches like big data and analytics has enabled whole new avenues of smart recommendations and suggestions for customers that can improve uptake and conversion. HNIs and investors looking for opportunities in stock markets and other high return avenues, all need advisory and guidance from financial service organizations. While building these capabilities is one side of the story, the important communications aspect here is how to enable smart campaigning and marketing? Financial services companies need a smarter and better-managed marketing and sales approach to ensure that your new financial products are promoted to the right audience who has been segmented based on their interests, preferences, and past interactions.

    The financial services sector is one of the most tightly regulated as well as the most active business sectors. Ensuring high customer satisfaction sector depends on how well you can align your services to customer’s financial affairs and how you can personalize your offerings to stand out from the competition. Better customer communications may well become the key to digitally transforming your financial business to deliver greater customer impact and better financial outcomes for customers and companies alike.