Financial services businesses struggling to differentiate on customer experience
Whilst digital disruption and the accompanying surge of fintech challengers have made customer experience a key battleground in the financial services industry, many financial services businesses are still struggling to differentiate based on customer experience.
Despite IT’s critical importance in delivering this, according to research commissioned by managed services provider Claranet the department is not successfully assuming a decisive role in customer experience.
Surveying 138 IT and digital decision makers from financial services organisations across Europe, market research firm Vanson Bourne found that 84% believe that the IT department should be more focused on customer experience. This is particularly concerning considering that 47% of these respondents also said that they are stagnating as an organisation because they are not keeping pace with competitors’ digital solutions and/or offerings.
Jason Zimmer, a FinTech specialist at Claranet, expanded on the research: “Digital disruption has provided an opening for nimble FinTechs and other start-up challengers to outmanoeuvre incumbents. One area in which they’re often able to take advantage of digital technology is in customer experience, where many financial services businesses are not meeting the modern consumer’s digital-savviness and intolerance of inconvenience. Taking on the challenge of a more competitive marketplace by aligning with these needs requires financial services businesses to leverage their technological skills and resources.
“Despite this, our research indicates that a large majority of IT and digital decision makers in this sector feel that their department lacks the requisite focus on customer experience.”
“In this context, it is hardly surprising that research shows that almost half of financial services organisations are languishing due to not keeping up with competitors’ digital initiatives. It’s hard for an organisation to execute effectively initiatives that provide for the modern customer’s digital needs when the technological infrastructure is not in place.”
When looking at the reasons for IT’s underwhelming involvement in customer experience, Zimmer assigns some of the blame to wider cultural issues within organisations: “Half of our financial services respondents said that the IT department is still seen as a cost centre, despite its pivotal role in value-creating and competitive innovations. This attitude is rooted in an old school perspective on what IT does – one that sees its importance confined to ‘keeping the lights on’ and maintenance. At a time when digital disruption is reshaping the market, this approach prevents businesses from getting the full weight of their IT department behind initiatives that require their technical nous.
“This perception is likely entrenched in the reality that many financial services IT departments still spend a lot of time on IT infrastructure and maintenance type tasks. This means they have less resources to dedicate to core business objectives, including being more competitive by meeting customer’s digital needs. Reliable infrastructure and maintaining basic IT functions is vital for organisational success, but there’s often no reason why this should not be outsourced to third-party specialists, allowing the IT department to refocus on what it does best – creating value for the company through the effective use of technology,” Jason concluded.
The figures quoted in this release are from Claranet’s 2017/18 Market Research Report – Beyond Digital Transformation, which will be published later this month.