If it’s true, as we often hear, that the consumer has finally lost patience with his or her bank,  insurer, mortgage lender or wealth manager, then can we look forward to a ‘two speed FS’ emerging? 

1. Those who ‘get it’, respond and accelerate. 

2. And those who think that little has changed, who fall by the wayside.

Dig into the reasons why customers take their business elsewhere and dissatisfaction with service is never far below the surface.  No retailer of size in any mass consumer industry can now survive without a high quality digital shop window and consistent experience across channels.  Service is experienced digitally.  And so customer satisfaction has become digitally dependent.

It takes time for networked industries like retail financial services to evolve new structures and competencies.  We should not overlook that the UK’s retail financial services sector is often held up, in global contexts, as a model of dynamism, probity and innovation.  It is large, diverse and open.

Okay, so the last seven years might have been unpleasant for the industry from probity and conduct standpoints, but the industry clean-up underscores that this is an industry capable of fast reform and in putting the longer term interests of its customers and so, of its shareholders, first.

So far, so good, yes?

Maybe. 

How far, in practice, are speed of innovation and customer centricity yet seen in digital customer services?  Do they look at the customer in the round?  Understand and respond openly to problems or questions which they pose?  Engage in dialogue to equip customers to make better informed choices?

 Jotting down how this might look, the attributes needed for this kind of digital service would be:

- relevance (information presented in customer’s context – need, time, form)

- inclusive (taking in the customer’s full financial position, not just the bit that the           bank, insurer, or wealth manager sees)

- impartial (no financial institution has the best solution for every need)

- creative (bringing third party web-based information sources into the discussion).

I struggle to name a bank, insurer, mortgage lender or wealth manager which does this today, digitally, at scale, day and night, for each individual customer.

The Economist put its finger on the direction of travel last October (‘Cracking the Vault’)  declaring: ‘The grip Banks have over their customers is weakening’.   

They’re not wrong:   

Customers want a holistic view of their financial affairs which avoids Sunday nights hunched over the family laptop surrounded by pieces of paper

The EU has woken up to the competitive and consumer benefits of forcing banks to share their customer data with third party providers (PSD2/XS2A)

National governments (and citizens) have woken up to the fact that their data belongs to them, not the bank, insurer, mortgage lender or wealth manager (Midata).

In short, the stars are aligning both for a surge in supply of PFM services and sharp acceleration in consumer uptake.

‘But’, I hear you say, ‘PFM is not new’. 

No, it isn’t. 

‘In the US it has been in the mainstream for years’.

Yes, that is so.

‘Neither is it new in the UK, as software (e.g BankTree, AceMoney,  Moneydance) or as a service (e.g OnTrees)’.  

Yup.  Agreed.

What is different at this point in the market’s evolution is that it is the banks, wealth managers and insurers themselves who have grasped that PFM is neither a just a threat nor simply an opportunity.

But a lifeline.

Why?

Well, customers, on the whole, like to buy financial services, rather than be ‘sold to’.   But one of the hallmarks of the post-crash purchasing experience is that it has become extremely clunky. No financial institution can afford not to be whiter than white.  So they have become so very compliant that even the simplest request has become prolonged, form-filling, rules–laden exercise.  

To close a couple of simple savings accounts, upgrade another and open a new one last weekend took me twenty five minutes by phone.  I listened patiently to a series of long scripts setting out every detail and consideration. Unfortunately the whole thing was delivered at such a gallop that much was unintelligible.  

This is not wholly the fault of the financial institution. We must hope for the recovery of a sense of proportion from the regulator.

So, if the sales process has become a nightmare, the lifeline is in the area of pre-purchase for it is here that banks, insurers, mortgage lenders and wealth managers are, still, at a unique advantage. 

They have a customer franchise, with needs.  

And the convergence of the enabling technologies for high-touch PFM are now all there:

- Conversational commerce technologies, for intelligent chat between customer           and Personal Financial Management assistant

- Secure financial holdings aggregation services

- Omni-channel digital platforms which flex accordining to the device through which       they are accessed

- The ubiquity of the smartphone.  

All these, it seems to me, now make it possible to offer customers holistic, in-context information in response to an expressed need.

Or to ‘nudge’ them into awareness of a need to act to better manage their financial position.

Which customer would turn down a service like that?

The credit-hungry twenty something who needs a little help to stay out of the red zone from month to month?

The growing family which needs help with options for more, yet  affordable, accommodation in their neighbourhood?

The time-poor Managing Director wanting to investigate how to provide a private income for her daughter when she takes the reins of the family firm in ten years’ time?

The under-protected family keen on ‘white-water’ outward- bound sports, vulnerable to a downturn in demand in their professional careers?

Exploring options for change in this way, it strikes me, is quite different from providing ‘Advice’. 

And an intelligent discussion between customer and PFM virtual assistant in this way could help customers think through a problem and motivate them to act. Even to ask for Advice from an appropriately qualified customer adviser. 

Customer satisfaction depends on Service quality. Service is experienced digitally.  Satisfaction is digitally dependent.

Customers prefer buying what they want and need rather than being ‘sold to’.  The purchasing process is mired in clunky compliance. 

Customers want and need impartial information guidance all the time, but don’t turn to their existing providers because they just don’t find it there.  

Watch the PFM genie appear. It won’t be long.