In association with Qubit
Customer expectations are changing. What do they demand from financial services brands nowadays?
Matthew Crole-Rees: People expect things to be at their fingertips, to be able to move their money around quickly and not have to go to a branch. The process should be simple and take a few clicks.
Adam Morghem: It does depend on someone’s level of financial literacy. The traditional relationship-based model has been broken but there are still different segments of your audience. You have to go after each one differently when talking about online financial services.
Jo Mayes: We deal with pensions and long-term savings and investments, so people are making life-changing decisions when releasing their personal money. There will be some transactions people are happy to execute online and there is an expectation that financial services brands will offer the same experience online as other brands. But there will always be situations where it is still appropriate to have face-to-face conversations.
Elliot Antrobus-Holder: Channels are coming together and digital is helping the financial services sector to bring its brands to life in branch. Consumers can sit down with an advisor and go through the products on the website. This is a big change.
Richard Levy: Digital has raised the bar in terms of customer expectations as people get used to brands such as Amazon, and financial services needs to match these expectations. But not everything has to be digital because people still want face-to-face [interactions]. I am not sure everyone wants to go digital.
Ian McCaig: This is about people using multiple channels when making a decision on a new financial product. Brands need to think about how they join up the dots. People don’t want to be treated as a first-time customer every time they interact with a brand. This is central to any brand, whatever channel and device someone is using.
What impact are newer banks such as Aldermore and digital-only entrants like Atom having? Are you sensing a lot of disruption in the financial services market?
Elliot Antrobus-Holder: There has been a lot of disruption from start-ups and this is being driven by changes in how financial services brands interact with customers. The volume of change for traditional brands in all sectors has accelerated in the past couple of years. Financial services brands will have to change even quicker. As an industry, we do not have a good perception for a lot of reasons. So a good customer experience online is one way to build the brand and trust, and change perceptions of the sector.
Richard Levy: The new players have an advantage in that they do not have legacy systems, so they can be much more flexible. They are filling a gap in the market by focusing so much on customer service and promoting how reliable they are and how people can access them 24/7. This is not about better products and rates but them saying say ‘we will treat you better’.
Richard Ireland: There has been a lot of disruption from financial start-ups and London is recognised as a hot-bed for initiatives, such as FinTech [financial technology]. Consumers are changing the relationship they have with money. Our research shows that people are taking control because trust in professional advisors has been lost. People realise this is an expensive way to have money managed. They appreciate that there are other things they can do with their money, not just put it in savings accounts. Look at peer-to-peer lending, which is now a strongly embraced sector with hundreds of millions of pounds involved. Traditional banks will struggle here because it impacts on their traditional model.
How can traditional financial services brands adapt their technology platforms when they are not technology businesses?
Adam Morghem: Our brand is more than 300 years old and traditional companies need to understand that there are other models that can add value. Brokers still focus on the relationship-driven model and to move them to a technology-led model means a big shift. Not all their customers will want this model.
Elliot Antrobus-Holder: Technology has to be the enabler, because the customer must be at the heart of this. How can the technology meet the customer need? This can get lost in the debate when everyone gets so excited about new technology.
Ronnie Brown: Companies must look at what they need to do to become a technology-led business. They need to be physically taken out of the traditional organisation and create labs and let people play by their own rules to solve problems quickly. They could create another company within the traditional company.
Jo Mayes: Historically, Standard Life was an intermediary-driven business but two years ago we defined that our customer is the policyholder. We shifted our operational model to ensure we understood their needs and supported them. This included carving out an ‘incubator’ model [for generating new business ideas], so that people could work in an agile way. We set up labs that had licence to achieve things in a different way. Over the next few months these labs will be integrated into the main business.
Ian McCaig: Integration of these labs can be tricky. Ultimately, you do need a customer-centric strategy enabled by the technology. The sentiment is right when the chief executive tries to rally the troops around technology, whatever your sector, but this can be a longer process for a financial services brand.
There can be small, quick wins within organisations that show the rest of the business that there are benefits – perhaps just by demonstrating internally how showing the website to customers in a branch boosts the average order value. Don’t try to do one-to-one personalisation: pick segments – new customers and your most important customers, for instance – target them and show value returns to win hearts and minds in the organisation.
Matthew Crole-Rees: It can be empowering if you have something you can back up with results, whether softer brand metrics or harder ROIs [returns on investment]. This motivates the team and people will get behind an idea. It shows how digital can make a difference and drive the bottom line.
What is the effect on your brand of the increase in peer-to-peer recommendations of financial services products and services?
Adam Morghem: This is becoming more important than professional advice. Peer knowledge and the increase in peer advice is the biggest threat to the traditional model of buying financial services from brokers.
David Hitt: In the past, we would have asked our parents or gone to the only branch in the village for advice. Now we live in an online world where the number of players has increased 10 or 20 times, so how do you choose? The only way available is to ask your friends.
Elliot Antrobus-Holder: With so many new entrants and regulations it can be difficult to help consumers in the decision-making process. There are so many sources of information and people are making a best guess, so peer recommendations help to guide them.
Jo Mayes: This is still a taboo area because people do not always like to talk about their personal money matters. Also, customers do not always understand their own needs. Now they will have access to their pension fund at 55 and this magnifies the importance of understanding their need.
Richard Levy: Peer-to-peer personal recommendation from a friend is becoming more important because trust in financial services is so low. You trust people who are on your side.
So how do you measure customer experience?
Matthew Crole-Rees: We have set up a customer experience task force and use net promoter scores. We are not scared to ask our customers for feedback. It can be daunting if they say something bad but it can also be rewarding. You must learn from the negative and be motivated by the good feedback. We have representatives in the task force from each department, so actions are taken quickly.
Jo Mayes: We measure customer satisfaction levels and link the measurement interaction with the products that individual customers have to improve the customer journey.
Adam Morghem: We run a survey and follow up directly on any issues. This has to be about listening and taking action to improve the customer experience. This is one way to avoid apathy.
Ian McCaig: Personalisation can improve the experience, such as asking people about their previous experience, but it is difficult to quantify the effect on revenue. When you use net promoter scores in the business and collect the data, do not only use the dashboard but see if someone is a promoter or a detractor. If they are a detractor, offer them a promotion or say sorry, or if they are a promoter, get them to share that experience.
So what is the biggest challenge you face? Is it to make the customer experience better?
Matthew Crole-Rees: Measurement is the biggest challenge. Often something feels like the right thing to do but you cannot always measure the return, so you need the confidence to go for something when your gut is telling you it is the right thing to do.
Adam Morghem: Getting a cultural shift in a 300-year-old organisation is a challenge. Lots of people have been in the company for 10, 20 even 30 years and it can be difficult to change someone’s mindset to emphasise that the customer experience is central to what we do.
Ian McCaig: You have to stick to the metrics and see where the shifts in behaviour are happening and follow through.
Jo Mayes: I agree culture is a challenge in our industry. We need to get people to think beyond the process and that they are being compliant and hitting targets. What does the experience feel like to our customers?
Richard Levy: There has to be a top-down culture change and any improvements to customer service must be genuine. New entrants have that USP [unique selling proposition] of focusing on improving these two areas.
So, who is getting this right in financial services?
Richard Levy: People always talk about First Direct and its reputation in the industry but it can be difficult to change because of the level of regulation.
David Hitt: The difficulty everyone in financial services faces is how to transfer that ‘First Direct’ example to the online experience. You need to have a reason to get in touch with people. Financial services brands must create that human world around the individual, as Amazon does, for example. Online services need to give people content and advice.
Adam Morghem: The brands that get the customer experience right will be those that can build a rapport with their customers without being intrusive. Relevant content can help to build strong relationships. For us, it is perhaps easier because brokers have similar needs.
What will be the big customer experience issues for financial services to tackle in 2015?
Ronnie Brown: We plan a big rebrand at Hiscox to improve our website and everything linked to the customer experience. It will be a big year for us.
Richard Ireland: The focus will be on customer retention at a time when media is becoming more expensive. You need to offer customers a good experience to engage and retain them. Do this through good customer experience, so they get what they want easily.
Elliot Antrobus-Holder: We have to accelerate the current customer journey. We want to differentiate and innovate.