Client demands are changing rapidly – not just a demographic shift, but also increasing demand for ethical finance and fast, automated services that still offer a personal touch. Meeting those demands can be a delicate balancing act
On the face of it, it’s a time of conflicting demands for financial services providers. While the past 18 months have supercharged digital capabilities and streamlined processes, organisations are still managing a swathe of customers resistant to increasingly automated processes swiftly becoming the norm.
Add to that a growing demand for ESG-linked products – led by baby boomers, according to the FT – along with increased competition from start-ups, and it seems the complex customer of tomorrow could be difficult to please.
It is, however, a time to be embraced by financial services organisations, says Dan Gallienne, Account Director at Orchard PR, who is creating a guide on how providers can refresh their strategies to
tap into new opportunities.
“We’re seeing a growing cadre of digital nomads really, who are getting involved in becoming consumers at an institutional and retail level,” he says.
“That, combined with the effects of the pandemic, where everyone has had to become more digital by necessity, means you’ve got a customer base that’s increasingly used to online interaction.
"What we’re seeing – and I think this is a consequence of the digital revolution the world has been undergoing for the past few years – is a more engaged customer base. People feel empowered and have the tools to serve themselves, to find information and manage data.”
As a result, Gallienne says, expectations from customers are also changing. “Where previously it might have been acceptable for an investment manager to report twice a year or even annually on results and performance, now they have to report almost daily, perhaps more.
"Clients know they can find that information, and people are becoming used to having information so quickly in other areas of their lives.”
Nicola Mauger, Manager at Butterfield Trust (Guernsey), agrees, and says the shift toward digital communications is giving customers more choice over the method of communications that works best for them.
“The way in which we deliver things to our clients has changed, depending on what their preferences are,” she says. “Clients are now asking for data and information in different formats, as opposed to big, formal board packs, for example. It may well be that it’s provided digitally now, and more regularly, with more easily digestible summaries if that’s easier for clients.”
As well as increased access to data, the sheer volume of digital transactions we now make through our phones, tablets and computers means customers’ expectations of fast, streamlined processes at all points of contact are high.
Figures published by Forbes show that, in 2020, 44% of retail banking customers relied on mobile apps to conduct business, and that the number only looks set to rise. It claims that, in 2021, the sector is likely to increase investment in “modern data and analytics tools, artificial intelligence capabilities and digital platforms”.
Getting closer to customers
Although investment is required, Gallienne believes that the shift to digital is creating new opportunities for authenticity among firms that might previously have operated in a way that kept them relatively remote from customers.
“Let’s say you’re a high-net-worth client,” he says. “You’re not meeting the director of your private wealth company at a fancy restaurant once a year any more. All of a sudden, you’re on a Zoom call with them in their spare bedroom, which has been hastily converted into a meeting room, and someone’s got a leaf blower going next door.
"It’s never been more apparent that we’re all just human beings living on the planet – engaging with someone on a human level has become increasingly important.
“Society has changed and, with that, expectations and norms have, too. It’s about characterising communications activity, and that can only be a good thing.”
Mauger says that, rather than being detrimental to client relationships, the increase in virtual communication actually makes it easier in many cases to maintain a regular dialogue.
“Before Covid-19, we operated in a much more traditional manner,” she says. “We used to travel to see clients face to face and we didn’t use video conferencing.
"But that’s completely changed. We’re meeting a lot of our clients virtually now, and we’re finding that clients are offering that up much sooner than they would a face-to-face meeting. It’s much easier to pin people down. It’s actually been a very positive thing for us.”
With many customers regularly active across a range of social platforms, there is increasing competition for the attention of new and current customers. The key to cutting through the noise, Gallienne says, is authentic messaging.
“The important thing in engaging with customers in the current climate is something that’s always been true in public relations, and that’s being interesting and insightful,” he says.
“One of the things that’s coming up a lot with clients is an imperative to educate. We’re almost returning to those BBC principles of communications activity that revolves around educating, informing and entertaining.
"Being interesting is as vital as it ever was. That’s arguably more difficult because it’s noisier out there, but the way to do that, fundamentally, is to be authentic.
“There’s an expectation in financial services now that the CEOs and c-suites, the people at the very top, are seen and heard, that the messaging has to come from the top down.”
A shared responsibility
It’s not only authenticity that tomorrow’s customers expect. Growing urgency around climate change, and social movements such as Black Lives Matter, are creating demand for financial products that give back. And tapping into the gap is not only an ethically responsible move for providers, but also commercially smart.
According to the FT, a recent study by Moneyfacts found that ethical funds in the UK proved more resilient than other types. The average ethical fund grew by more than 4% during the pandemic, while non-ethical propositions made an average loss of 1.5%.
“Purpose is increasingly important, so people want businesses to have a purpose and to stand for something,” continues Gallienne. “Customers expect the top-level people to be the embodiment of that and the voice of that.
“I think that there’s a really great opportunity for financial services firms which, generally speaking, have been relatively conservative in their communicating. They can be bolder and establish a clear voice and identity.”
For financial services providers, whether long-established or agile disruptors, one of the main challenges lies in balancing the convenience of automated processes with a personalised service.
“It’s a delicate balance to strike between being seen as a technologically able and innovative business that puts effective solutions at the heart of what is offered, and the message that you’re still a load of people who are approachable and can provide excellent customer service,” Gallienne adds.
“How do you balance that? It’s tricky, and organisations might need to try a little harder. You need to be more proactive and that’s where it comes back to having a strong brand identity and strong corporate messaging for what you want to achieve. Employees at all levels should feel empowered and supported in being proactive.”