The rise of online banking, digital apps, and challenger banks has caused considerable disruption across the finance sector. New players in the market are shaking up the industry via innovation and are causing wave after wave of transformation.

Digital transformation has also given the consumer more power, with customers demanding better experiences and the very best price for services. In today’s world, interactions with a business must be quick, seamless, and possible via multiple channels – whether that’s online, or on the phone via an app. Consumers also demand to have instant access via any device when buying online or managing their financial affairs.  Finance organisations that fail to adopt digital technology to meet these consumer expectations risk delayed response times, sub-optimal service feedback, and a loss of customer loyalty. 

With consumer expectations shifting, and the industry evolving at a rapid pace, now is the time for companies to embrace digital disruption and new innovative technologies. By doing so, business leaders can help their organisations address four key challenges facing companies in the finance and insurance industries – security, risk management, customer experience, and operational efficiency.

A sector under cyber attack

A major concern for finance and insurance organisations is ensuring operations are secure. In fact, according to research from the Boston Consulting Group, financial services firms are 300 times more likely than other companies to be targeted by a cyberattack— and dealing with those attacks and their aftermath carries a higher cost for banks and wealth managers than for any other sector. This threat has only been exacerbated by Covid-19, with hackers looking to exploit the vulnerabilities created by staff working from home.

Cyber-criminals see financial organisations as a potential gold mine due to the wealth of customer data they hold. Guaranteeing security is, therefore, paramount. In addition, PCI compliance and FCA regulatory requirements demand that systems and customer communications are secure, robust, and always auditable. Failure to comply with these regulations can contribute to brand damage and loss of customer confidence. So, a coherent security strategy designed to enhance protection, prevent cyber-security threats (viruses, hacking, piracy, and DDoS attacks), and align with best practice is crucial.   

Profiling customer risk

Technology can also assist with the profiling of customer risk. AI, for example, will be able to analyse data more efficiently, enabling businesses to employ risk identification and mitigation measures and gain actionable insights to improve competitiveness and enhance customer security.  

Using tech to improve the CX

Innovation is key to businesses in the sector transforming the customer experience (CX). With the financial sector becoming more competitive than ever before, having a stellar CX function can be the difference between winning and losing custom.

As part of their digital transformation process, business leaders should consider implementing technology, such as Machine Learning (ML) and Robotic Process Automation (RPA). Both of these technologies have an important part to play in the drive for efficiency and improving the CX function. By streamlining customer service and automating processes throughout the ecosystem, teams can focus on providing an excellent customer experience. This is particularly true in finance and banking, as real-time, personalised products demand vast amounts of data instantaneously, adding burdens in terms of time and resources which AI applications can help to alleviate.  

Embrace digital disruption

Businesses, however, do face a number of challenges when it comes to driving operational efficiency. Using a variety of technologies from disparate vendors is complex to manage and not always cost-effective. Companies, therefore, should take the opportunity to consolidate – simplify infrastructure, reduce costs, and replace technologies with a multi-channel contact solution from a single vendor.

If the finance sector does embrace digital disruption it looks set to reap the rewards. For example, creating an omnichannel experience will not only improve customer service, it will also provide businesses with the opportunity to capture data that can inform them of customer behaviour. These insights can be used to recommend other products and services. Conversely, new market entrants need to broaden their product set once their initial offering has gained momentum. 

While the sector does have many problems to overcome, digital disruption does in fact provide an opportunity to benefit from new technologies, improve customer service and security, and drive efficiency throughout the organisation.