With the current economic and political turmoil in South Africa, it’s easy to lose sight of what’s going on around us. But it’s important at times to step back and get a glimpse of the bigger picture. Although we may each be functioning within a particular jurisdiction with its respective rules, limitations and benefits, we need to consider that the world we are living in is much bigger and the possibilities much greater than we’d like to believe.
The bigger picture – what is the future of the financial services industry
There are some exciting developments in the world of financial services and, depending on where you are in the world, these could affect you. We took a look at some of the most important trends identified for 2016.
Accelerated machine learning and AI
In 2016 we will be seeing an increased tendency for financial services institutions to use machine learning, especially with regards to fraud and risk identification. This means data-science will be a growing industry and companies will increase development and expansion of these departments within their ranks. This also means more advanced techniques and applications will be used to improve user experience and real-time identification for the financial industry.
Banking and financial institutions will increasingly use technology to provide real-time remote services to provide customer services and support. Essentially, there will no longer be an excuse for providers who fail to traverse borders, jurisdictions and time-zones, as customers will also increasingly demand access to services 24/7 wherever they are in the world.
Financial services companies will, in 2016, start to integrate their compliance and legal regulations. Institutions will also integrate systems more efficiently to verify, vet and communicate between their data warehouses and those of governmental institutions and other regulators. This will lead to faster service provision and turnaround times as well as customer service query resolution and assist governmental bodies in updating user account data. This will also overcome regulatory concerns.
Financial institutions functioning in silos who provide exclusive services will find it harder to retain existing clients and gain new clientele. The only way for these service providers to stay ahead of the pack would be to form strategic partnerships which offer clients all-inclusive financial services where they can transact and action services for each aspect of their financial portfolios. Clients require integrated services which do not require them to step outside the scope of their provider to resolve a particular query.
Longer-term annuity and portfolio goals
The insurance industry, according to Deloitte, will be taking a new and improved approach to annuity provision which will focus on longer-term products and models. These providers will also focus more on inclusion – educating the customer on their long term goals and including them in the decision-making process instead of simply ascribing to them. The industries will need to consider longer life spans and a more enlightened clientele which requires product longevity as the greatest focus for addressing the customer’s needs. Essentially they will have to build a relationship with their clients which is sustainable throughout the customer life-cycle and relies on information fluency and transparency.
Understanding the consumer
Companies will spend much more on predictive analytics and neuromarketing research initiatives to better understand their consumers. This will require tracking and analysing online customer behaviours as well as investing in paid-for research initiatives which companies can then use to tailor products, services and platforms such as websites, smartphone apps, video chat, mobile sites, cell phone banking and USSD services.
From banking to retail
Front-end and institutional sides of financial services branches will be adopting more cues from the retail industry in improving customer interactions and client intelligence. Essentially they will be looking at better ways to serve customers – with a more aesthetic and efficient way of transacting. The process needs to move from simply being functional to one which is psychologically appealing through visual and sensory appeal.
Social and environmental accountability
Although environmental tax has not been widely integrated and applied throughout the globe, financial institutions will in 2016 have to strategise a path forward for their environmental and social initiatives. Consumers are becoming increasingly more concerned with and involved in initiatives which would cater for the widespread environmental and cultural degradation fuelled by big corporates. Companies can no longer simply throw money at the problem, but will be required to ‘get their hands dirty’ in showing their support and dedication to real humanitarian issues. Essentially the thought is that sooner rather than later seems to be the best approach and positive initiatives will go a great way in strengthening brands.
With crowdfunding and peer-to-peer lending becoming bigger trends in the market, financial institutions will need to innovate in order to stay abreast of the times. This may require complete overhaul of current lending models, marketing prospects and customer segmentation in order to reach neglected segments and retain current clients.
CRM across platforms
As customers move more and more into the online sphere it will become increasingly important for institutions to follow this lead and interact with clients on their turf. Essentially brands will need to realign their client interactions strategies to be able to talk with clients and not to them. Any lag, disregard or claim of ignorance in interacting with clients will become increasingly unforgivable, which means brands will have to ensure that they are adept at managing customer relations swiftly, efficiently and transparently.
These are just some of the trends foreseen for 2016. We look forward to seeing how all financial institutions will adapt and grow in order to cater for their clients.