Outgoing Salesforce President and former BT CEO Gavin Patterson’s call to UK boards to “get digitally literate” underlines a growing concern about the gap in digital skills and leadership at the top of UK companies. 

The issue is particularly acute in financial services, with a
recent study revealing that 81% of FS decision-makers believe their companies’ digital goals are being held back by their senior leaders’ poor tech knowledge. This includes not understanding how to use emerging tech, such as AI and machine learning to benefit their business. 

A further 75% report that their company’s digital strategy is impacted by a lack of implementation experience, while just 34% agree that their organisation’s digital transformation efforts have been successful.  

Meanwhile, as established financial services companies struggle with the basics of digital transformation, big tech from WeChat Pay to Apple Pay continues its relentless advance in the sector.

We Chat Pay owner Tencent is currently experimenting with palm payment devices,
while
Apple Pay recently announced a new savings account for the Apple card.

So how can incumbent brands lagging in the race for digital maturity regain vital ground? Here are three topline learnings:

1. Make customers the boss

Since digital-first challengers such as Apple burst onto the scene with seamless digital, customer-centric propositions, incumbent financial brands have taken up their position as the ones forever playing catch-up.

Partly this is a mindset issue: despite the popularity of fintech contenders, many established brands remain primarily concerned with their internal linear metrics, such as profitability and delivering shareholder value. Witness Barclays’ recent Q3 results
where the headlines focussed on the fact that the £1.512 billion net profit attributable to shareholders was higher than analysts
expected, rather than talking about customers. Within these companies, power continues to be held by people controlling the profit and loss and by heads of compliance.

Yet in a sector driven by accelerated customer expectations, financial brands that forget their key asset is their relationship with the customer, do so at their peril. To compete effectively with GAFA and the neobanks, incumbents need to avoid merely paying lip service to customer outcomes and instead make them a core metric. This approach requires making every decision through a lens of what makes the customers’ lives easier and more satisfying. Take banking as an example. A customer-focussed rethink of banking would involve simplifying the banking process into an

invisible, intuitive, personalised customer experience around three core customer needs: spending, borrowing and saving (or investing). Using APIs, progressive banks could apply insights from their customers’ banking, social media and location data to automatically make the right financial decisions for that customer. Throughout this process, banks would be able to leverage their core asset – their relationship with and deep knowledge of the customer – becoming a trusted, personal financial adviser. 

While this sounds like blue-sky thinking, the good news is that thanks to cloud-based banking platforms and APIs, this customer-centric approach is deliverable right now. Of course, financial brands are welcome to ignore this opportunity and carry on focussing on their internal KPIs. But the chances are that their competitors won’t. 

2. Place product, design and engineering talent in charge

Transforming banking / financial services activities into an invisible, personalised experience focussed on customer outcomes, requires more than a mindset shift: it needs a digital-first approach. This is a real challenge, given recent surveys revealing that a lack of digital product and technology experience at senior level and a lack of commitment to required changes hamper financial services’ ability to be digitally progressive. To address this, incumbent banks and financial services need to ensure that their top product, design and engineering talent have a seat on the board. 

This is because designing and building invisible, tech-enabled, customer-centric financial services products and services requires in-depth digital knowledge. Product people, designers and engineers have this knowledge and bring much needed implementation experience to strategic conversations about creating products and services designed around customer experience.

3. Set ambitious goals for external consultants

External consultants have a key role to play in designing radically customer-centric products and services and helping to level the playing field between legacy players and challengers. Working with a trusted partner over the long term can boost the success of digital projects. In a recent survey, 65% of financial services companies that rely on third-party digital services more than half the time

reported that the most recent digital project exceeded expectations. 

On the face of it, it’s promising that consultants are exceeding client expectations. However, the financial services sector tends to play safe and work with the big, entrenched legacy consultancies. These are arguably not delivering ambitious, differentiated thinking to match the twin challenges posed by accelerated consumer expectations and competition from new fintech players and GAFA.

If these consultancies are exceeding expectations, there is scope to raise the ambition level still further. This could include encouraging consultancies to think beyond delivering incremental change and, instead, radically challenge the status quo in favour of customers. Financial services companies also need to feel empowered to look externally to other verticals for inspiration and ideas, especially ones that have imaginative, new approaches to customer-centricity at their core. This new AI-driven shopping platform that constantly learns its users’ shopping tastes is a good example. 

Final thought

Visionary, tech-literate and courageous leadership is key to financial services brands delivering on their digital potential and placing customer outcomes at the heart of their decision-making. Right now, incumbent financial brands’ journey from static, self-serving entities to intuitive, individualised, customer-centric services seems a distant prospect. The good news is that technology and talent already exist to help those financial brands prepared to make the leap. The rewards of first-mover advantage surely outweigh the risks of standing still. 

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• Source: https://www.finextra.com/blogposting/23363/three-customer-centric-leadership-lessons-for-pioneering-financial-services-brands?utm_medium=rssfinextra&utm_source=finextrablogs