Before the financial crash, IT in the financial services sector was considered a necessity in the march towards modernity, but not an essential feature of the customer experience. A lot has changed. Banks are still playing catch up compared to challenger FinTech companies and new digital-only startups.
Even back in 2014, a report by PwC found that improvements to online/digital banking would increase the lifetime value they can generate from customers. The report on financial services also highlighted some key trust issues; with 25% of respondents not confident banks offer sufficient protection of personal and account details. This is another area where IT can play an important role to improve the customer experience.
Technology And Compliance
Banks and financial services companies also operate with more regulatory restrictions than ever. Although IT can’t change the rules, it can improve operational efficiencies, which will make it easier to achieve the cost-to-income ratios (CTI) savings and higher returns shareholders need. Here are a few ways banks and financial sector companies can generate more value from IT.
3 Ways To Get Value From Information Technology
#1: Forget Digital. Go Omni-Channel
Customers don’t interact with brands through siloed communication channels. They want to engage with brands using whichever channel is more convenient for them at any one time. Most brands give customers a wide range of choice: phone, email, online messaging, web, apps and social media. Banks also provide these choices. However, at present, they are struggling to connect them, which means customers aren’t getting an Omni-channel experience.
Instead, they are getting a range of channels, without the back-office IT that would allow customer service agents to deal with queries regardless of the method of contact used.
#2: Implement constant testing and improvements
Over the last few years, we have witnessed the rise of FinTech and challenger banks. Numerous non-bank players have also moved into traditional finance areas, such as payments, where even Apple and Google are operating services. Many of these have a digital advantage since they have the tech talent and experience to create seamless digital platforms and tools.
Banks don’t have that advantage. Traditional financial firms are lumbered with legacy technology, making it harder to constantly improve online services. For them to adapt, they need to apply an agile approach, which involves constant testing, learning and improvements made to online services.
#3: Partner with innovators
FinTech companies are already generating £20bn in annual revenues, according to a recent Ernst & Young report on the sector. Banks are starting to see many as potential partners, instead of threats since new ways to save money and improve the customer experience are emerging without the constraints of large corporate procedures.
For financial firms to keep growing, they need to continue partnering with innovators and entrepreneurs. Payments, machine learning, the blockchain and back-office systems are four areas where banks can benefit from the digital talent and IT expertise.
When it comes to digital innovation, traditional financial services institutions have the advantage of size. When IT deployments are made at scale, they can save and make money quickly. Working with internal digital teams, and outside vendors (such as IT service providers), the financial sector can generate enormous benefits from new technology and IT solutions, providing they put the customer's needs and cost savings at the centre of each strategy.
5 IT Strategies for Business Success
Information Technology (IT) has revolutionised the lives of individuals and organisations. Innovation in this sphere has created business opportunities that did not exist five, ten or twenty years ago, both in the way companies operate as well as the services and products they sell.