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Belinda Gannaway

Digital transformation in financial services: a roundtable May 2014

Notes from NM’s financial services roundtable on 13 May 2014.

The financial services industry in the UK has a long and illustrious history, its practices and business imperatives developed over hundreds of years. It’s little surprise, then, that at our recent roundtable we heard from decision-makers from across the industry that the sector is stuck in a quagmire of legacy systems that hinder change.

Then there’s the volume of demands on the sector to meet expanding regulatory requirements. Some banks live simply to stay out of jail, we heard. And that effort is exhausting them. So banks are focusing on keeping the ship afloat rather than creating amazing new touch points for customers.

Just think what could be done to improve the customer experience with just a fraction of the budget spent on stopping out-of-date systems falling over, pondered one delegate. And it’s an interesting question when you look at the amount of innovation going on in fintech start ups. The opportunities are there for the picking, but not the cash or focus it seems.

More on this from our self-confessed financial ‘nerd’ Danielle Sheerin next week, but in the meantime, here’s my take on the key trends we heard are transforming the sector.

Cultural transformation

All the companies present are in the midst of big and long-term change programmes, trying to put the customer at the heart of the organisation. But with varying degrees of success (see above).

Too much choice?

Some delegates suggested banks are confused about where to invest to make the biggest impact, which actually leads to them doing nothing at all.

Trust

Customers’ expectations of how a bank should engage with them have changed as a result of online experiences with all the brands they deal with. Access, knowledge and security are still customers’ key concerns. But, it was agreed, it’s the vast new range of options for meeting these three factors that is changing the game.

Understanding customers’ contexts

The group agreed that future success for financial institutions lies in understanding and responding to customers’ unique contexts and doing something meaningful with the data they are sharing. This valuable information is currently being squandered. Little wonder there has been fragmentation of the sector with new entrants coming along and delivering highly tailored services to very niche audiences.

Transparency and collaboration

The group believed new ways of working would require greater transparency and collaboration with customers to create much better products. It was also mooted that there was a need to streamline the in-store and digital interface – something that no single institution has yet to master within the sector – and make the customer experience a whole lot more human. How? By making that positive customer experience a focus in everyone’s job.

NixonMcInnes roundtables are designed to connect peers from different organisations so they can share insights and learn from each other. To apply for your place at future events contact louise.ash@nixonmcinnes.co.uk.

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