It’s that time again when we look ahead to the year to come. For 2020, we’re going to see financial services companies accentuate and accelerate the priorities of recent years. And we are going to witness the rise of Platformification as the way to achieve these long-standing goals.
Financial Services and Insurance organizations will continue to strive to deliver excellent customer and employee experience, accelerate the speed of innovation while curbing costs, and manage cyber security threats while addressing risks and regulations. What will change is how companies deal with the complexities to deliver the information advantage across their organization.
“2020 will be the year that banks and credit unions focus on changing their internal culture and building digital talent as opposed to buying technology. There will be a realization that, without a ‘culture of innovation’ and shift from the banking model of the past, investments in technology will never result in positive results,” says Jim Marous, Owner and CEP of Digital Banking Report and host of the Banking Transformed podcast. “Organizations will also realize that digital talent is in short supply and will follow the lead of Amazon in training current management and employees to be prepared for the digital ‘future of work.’”
So how will this play out in 2020?
Taking customer experience to the next level
In a global survey by PwC, 54% of respondents highlighted customer experience as an area of improvement, with customer expectations being shaped by hyper-relevant, real-time and dynamic experiences. Banks, insurance companies and fintechs will use their data to build a forensic understanding of each individual customer. Accenture’s 2019 Global Financial Services Consumer Study found that customers increasingly want fully personalized offerings delivered to them seamlessly across physical and digital channels. Today, phygital is key!
AI a key driver in customer hyper-personalization
We’re moving towards hyper-personalization and that starts with listening to what customers want – and taking action in real-time.
According to April Rudin, President of The Rudin Group, “2020 will see banks and wealth-management firms make a higher priority of leveraging unstructured data that resides in all manner of relevant content. Why? Because unstructured data that resides in emails, word docs, videos, presentations, webpages, and much more, often holds real-time insights and early-warning signs that can help financial firms customize their offerings, identify new investment opportunities, and expose risks previously unseen.”
AI is necessary to provide smarter, more timely engagements, and customer data can be used to predict the types of engagements you’ll need to have with customers.
From primary financial institution to primary data institution
The goal of many banking organizations has been to become the primary financial institution for their customers. However, the introduction of neobanks and challenger banks has made it easier for consumers to expand their relationships across many institutions and providers.
Financial services companies will look at their data to improve not only customer experience but the types of service they offer. Accenture’s 2019 survey highlighted that consumers were willing to share more data with companies that could fulfill additional requirements, and becoming the primary data institution will allow banks to more accurately address customer needs and build loyalty. This is especially true as Open Banking takes root, and institutions look towards the potential of data acquisition and sharing through platformification.
Digital identities will transform how the sector operates
A greater focus on data will see financial services companies begin to enrich the standard data they hold on customers and add to it. Whether social media or transactional data, a customer’s personal data will be collated to form a central digital identity. This identity will result in better customer experiences and product targeting, improved security, risk mitigation and compliance.
Consent management informs more than customer experience
With the rise of global data privacy regulations such as GDPR, OAIC, PDPC, LGPD and the California Consumer Privacy Act, digital consent management is increasingly important to ensuring financial services companies deliver products and services in a compliant manner. As companies build bigger ecosystems and collaborate with a wider portfolio of partners, obtaining the proper consent is critical. Consent management will become an integral part of financial services companies’ data management, capture and sharing strategy to increase efficiencies, lower risks and innovate.
The rise and rise of platformification
This brings me to the biggest trend we’ll see develop through 2020. In order to achieve their goals, all financial services organizations must develop new and better ways to securely share data and collaborate.
“2019 saw some interesting moves in open banking, but also an emphasis on the practical challenges of complying with new regulatory requirements,” says Marie Walker, Head of Content at the Open Banking World Congress. “2020 is set to be the year when data-driven ecosystems – led by financial services – really start to take off.”
In the next 12 months, expect to see more fintechs and insurance companies looking to platformification to access more financial information in real-time and offer personalized products and services.
Information governance is a key business driver
The pressure on information governance will be fought on three fronts: regulatory, cyber threats, and ethical responsibility. The traffic generated in ecosystems and digital platforms needs to be policed with forensic details, due to the volume of personal information traveling across them. It’s not enough for companies to ensure customer information is secure within the organization. The data also has to be transparent, ensuring that control is granted by customers and is available to regulators while minimizing the impact to any customer experience. Organizations will increasingly adopt data management strategies with governance at the heart to adapt to security threats and regulatory commitments quicker, with less cost, and more control.
So, 2020 in two words: Information Advantage.
Information Advantage will be the differentiating factor for the FSIs who can fully grasp the potential of global digital platforms.
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