As 2017 draws to an end, we anticipate another exciting year of innovation and transformation for institutions in Australia and New Zealand. Organizations will face many obstacles in the new year, and new digital technologies mean they will not struggle for a choice of solutions. Successful companies will focus on the ones that offer the most value to their customers, employees, and profits. All this choice reminds me of my family life’s transformation and disruption.
We are living through the a major home renovation while continuing to live in the house. The simple renovation is throwing up some surprising digital conversations; conversations about smart appliances, connected homes, and the Internet of Things. These wouldn’t have even been thought possible two, three, or five years ago. With so much choice, the question becomes how to choose. What is right for your situation may not be right for others. Before you can select a solution, you must ask how much you need it, how long you need it for, and why you need it.
The financial services sector is no different from my own home renovation. It is going through unprecedented transformation, completely transforming its position in society and the role it plays in our lives. Banks and insurers have always been viewed as formal, must-have services that manage our finances and policies behind the scenes.
But our expectations as customers are changing; we expect more from financial service providers than what they traditionally offer. So how do they move with this change in expectations? Here are my thoughts on the must-do bucket list for banking and wealth management providers in 2018; a follow-up blog will cover what insurance companies must do.
Banks: Engage with open banking
Open banking is on the rise. This means big things for small banks, which could mean small profits for big banks that close their doors to open banking. As third parties develop a more competitive edge with open banking services, banks of all sizes must establish relationships with these new players to stay relevant.
Banks: Enhance the digital experience
Consumers expect cohesive digital experiences across all channels. Banks of all sizes must meet this expectation before they can rise above it. Once they are connecting with customers through a seamless, personalized experience, banks can remain agile by delivering new products quicker than competitors. This approach will future-proof banks of all sizes as innovative third parties move into the sector. Improve your customer experience in small, fast, incremental stages. Customers will take notice if you make simple, positive changes to their digital experiences more frequently.
Banks: Comply with government mandates
The Royal Commission, which commences early next year, will be an important opportunity for Australian banks to rebuild consumer trust after recent damages to their reputations. Banks must use this 12-month inquiry as an opportunity to display trustworthiness through transparent compliance.
As Labor currently hold a majority in Australia’s Parliament, big banks will likely face more regulation than smaller financial institutions (such as credit unions and small banks). For this reason, big banks will need to keep up with regulations as well as open banking technology in order to stay competitive with small financial institutions.
Banks: Remain agile and open to risk
For small banks, the time is now to increase digital relevance. While their size makes it easier to embrace new technology, it gives them a lower risk threshold for investing in open banking. Despite the risk of investment, the greatest risk is becoming irrelevant in the era of open banking.
Wealth management: Realize your unique advantage
The financial institution facing the most disruption is the wealth management sector. As third parties place more wealth management software at consumers’ fingertips, wealth management firms must integrate their expertise with advanced financial software to offer customers’ human insights like no app can.
Wealth management: Meet customer expectations of accessibility
Wealth management firms must also engage with customers on the level they have come to expect from apps that provide easy to understand financial advice in real time. Fortunately, cloud-based systems and real-time data have given wealth management firms the ability to aggregate transactional information across numerous accounts at unprecedented speeds.
Wealth management: Drive efficiency post-merger and acquisition
Wealth and investment advice companies have grown significantly in size due to recent wealth business acquisitions from large banking institutions. These companies now need to optimize these purchases to benefit internal and customer processes. The key after a merger or acquisition is to run a consolidated transformation to add consistency across the whole business, including optimization of workforce engagement, customer experience, and innovation.
The costs of managing, powering, and moving products and services are about to change dramatically. Tick Tock: Start Preparing for Resource Disruption.