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At the annual CEB Financial Services Technology Summit, business leaders from financial services met to discuss the current state of the industry. The three-day event in Boston featured keynotes and presentations from CEB, ATB Financial, Capital One, MetLife, RBC and other top firms in the industry.

Here’s a look at three main takeaways from this year’s summit.

  1. Use technology to build deeper customer relationships.

The summit’s theme was around the idea of reimagining loyalty. It’s a timely theme given that, according to CEB’s data, many customers today are doing business with multiple financial institutions. Innovative companies that offer alternatives for payments, financial advice and other services are also stealing share from traditional financial services firms.

In his presentation, Derek Frost, principal and executive advisor at CEB, said traditional drivers of bank loyalty—ease of doing business with a single institution, for example—are now irrelevant to digital customers. Frost offers two reasons why this is the case. First, customers today can now easily learn about new products from multiple providers. Secondly, technology has enabled customers to manage their accounts from multiple institutions from one screen, so there’s no need to stick to just one company.

The solution to the decline of customer loyalty? A stronger relationship with customers. According to Frost, banks need to focus on deeply understanding their customers. Banks also need to dig deeper to learn what today’s customers want from financial institutions. CEB found that, while customers want more information and motivation about how to keep their finances on track, banks are generally more focused on supporting financial planning and making it easy to purchase additional products.

  1. Start with your customer’s goals.

Tech was a huge topic at the summit as presenters shared new ways of automating processes and services in various aspects of financial services. While the event was abuzz with new trends in wealth management, many presenters also reminded attendees that having the latest tech alone won’t help banks win the battle for loyalty.

In his keynote, Bruce Young, principal in CEB’s financial services practice, shared compelling reasons why banks need to rethink their approach to digital strategy. According to Young, the industry is missing the mark with digital investments because digital is still largely seen as just another distribution channel. Because of that assumption, the billions of dollars that banks spend in digital end up not having any effects on customer loyalty.

A better approach is to start with the very same people banks want to win over: the customers themselves. CEB’s research suggests that financial institutions need a better grasp on the goals and motivations of their customers.

CEB found that customers want financial service institutions to educate them about financial choices, reduce the complexity of managing their finances and motivate them to work on their financial goals. Digital tools and channels can help customers achieve these goals, but banks need to step back and consider the big picture first. CEB recommends an approach where customer problem solving is enhanced by digital tools. Harnessing customer intelligence is a necessary first step in understanding where digital fits into the picture and making sure that institutions remain relevant to the digital customer.

  1. Gain customer insight to drive innovation and sales.

While analytics tools were a major topic at the summit, many leaders were quick to point out that what companies ultimately don’t need is more data. Instead, they’re starving for customer insight.

Keri Gohman, Capital One's head of small business banking, said in her keynote that traditional financial services institutions are not doing a good job building their relationship with customers. And, as a result, the bank-consumer relationship is increasingly (and dangerously) becoming transactional.

It’s not helping that banks are lagging in digital innovation. As tech companies like Apple, Samsung and Amazon enter the payment and financial space, banks are further pushed away from the customer. Financial institutions are at risk of fading into the background.

To compete, banks need to build their capacity to building genuine relationships with their customers. Before they can improve the products, interactions and experiences they offer to their customers, banks must first build an ongoing relationship with customers and gain customer insight.

Products are becoming more commoditized, according to Gohman, and customer experience is becoming the competitive advantage. In this brand new world, deep customer intelligence is key to remaining relevant.

For more on the changes facing the financial industry, check out the white paper Cashing Out: How Financial Institutions Can Survive Disruption.

Photo credit: CEB's Twitter account

How to keep your customers from cheating on you

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