Last updated: Customer engagement is key to success for financial services

Customer engagement is key to success for financial services


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Like every sector, financial services companies are grappling with deep and fundamental change. First, the traditional customer journey – call a hotline or visit your local branch, listen to the advice of an expert, purchase a financial product like a personal loan or insurance premium – is no longer the norm. It has been replaced by an unpredictable sequence of touch points spanning research, consideration, purchase, and post-purchase. What is clear though is that the customer, not the brand, is now firmly in control and more confident than ever to compare and contrast products and shop for the best deals.

Secondly, a series of major scandals has undermined the most important part of any financial services company’s value proposition: trust. The cumulative impact of the 2008 financial crisis, the Libor rate-fixing scandal and the mis-selling of payment protection insurance (PPI) has savaged the reputation for integrity and trust that the whole industry’s success depends on This has encouraged today’s savvy, discerning customer to abandon their traditional loyalty to these iconic institutions, and open their eyes to alternative providers.

Finally, just like Amazon and Alibaba in the retail sector, Netflix and Spotify in the entertainment industry and WhatsApp and Skype in the telco space, financial services companies are also under siege from a host of emerging, agile service providers with new, differentiated business models. Price comparison websites like, or online, ‘branchless’ banks like First Direct are putting insurers and retail banks under additional pressure. Worse, all conquering Google is now delivering insurance quotes in the UK, and Apple Pay is on more than 40 million iPhone 6s.

This ‘perfect storm’ represents a real and present threat to the ability of major financial services companies to retain customers, inspire loyalty and win new business. However, the banks and insurers that aggressively transform their approach to customer engagement in line with the 21st century consumer can still win back the trust sacrificed over the past decade and ultimately retain their positions of dominance in the financial services industry. So, what does this transformation entail?

Customer engagement: Consistent, relevant omnichannel experiences

As consumers spend more time researching the products and services they wish to purchase, it is critical that financial services companies offer smarter ways to quickly and easily compare and contrast the benefits of certain deals. The rise of price comparison websites demonstrates the appetite for simplicity and clarity in financial products. At this stage there is an important role for agents to play, across a range of different touch points – a free ‘instant quote’ form, an on-screen chat session, an in-person meeting at their home – to help support and educate a customer, hence re-establishing trust and boosting loyalty.

Providing an omnichannel experience – consistent, contextual, and relevant across every single touch point a consumer interacts with – is increasingly becoming ‘table stakes’ for any company that engages customers in the digital sphere. As consumers get increasingly comfortable with requesting a loan or signing an insurance policy online, every single channel – mobile, web, contact centre – must be capable of performing that function. Furthermore, the physical, in-branch experience must be tied to the virtual, online equivalent so that when a customer walks into a high street bank or insurance broker, the staff inside can pick the journey up seamlessly from the last touch point.

Use data to surprise and delight customers

Next, financial services companies must sensitively but aggressively exploit one key competitive advantage they possess: a wealth of transactional data about each of their customers. The cheques we write, bills we pay, times we use a debit or credit card all provide helpful ‘signals’ about our purchasing preferences. Properly harvested, this data can be used to surprise and delight customers; a personalized insurance premium for their new car, or advice on budgeting and saving based on their recent spending patterns. It’s a treasure trove of opportunity for financial services companies to differentiate and impress.

The ability to combine transactional and historical data with real-time browsing data is also unlocking the power of contextual marketing and predictive analytics for financial services companies. For example, if a customer bought a car twelve months ago, and is visiting the insurance section of the website – why not instantly target that customer through their favourite channel with a coupon or discount for a driver with 1 year, no claims? Insurance firms are already starting to embrace in-car devices that measure how a driver uses their vehicle, then provides a quote based on that behaviour. This isn’t ‘futuregazing’, it’s what your customer expects right now.

Data must also be used reshape the traditional outbound marketing techniques employed by financial institutions for decades. For example, if customer behaviour across different digital touch points shows a spike in engagement around money-saving content after the holiday season, why not provide a free budgeting or bill payment app with the next round of credit card statements? Or if in early September customers are looking at long-term savings plans to fund their childrens’ education, distribute a tailored offer designed to inspire action. Using real-time customer data provides powerful, actionable insight that isn’t based on ‘gut’ or tradition.

Think like a retailer

Financial services providers are locked in a battle to stay relevant, as a changing customer journey allows agile third parties to encroach on their turf. Survival and future success depends on their ability to think like retailers, constantly finding ways to surprise and delight customers and move them along the purchasing funnel. They are sitting on a number of important advantages – strong brand recognition, a wealth of powerful data – but in order to make them count, they must put customer engagement right at the heart of their business.

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By Roland Bloesch
Global Director of Financial Services, hybris and SAP Customer Engagement and Commerce

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