As the global consumer demand for financial services products continues to evolve beyond 2021, what are the leading trends that we are likely to see in the coming decade? Driven primarily by innovative technologies, financial services companies or Fintech disruptors are now touching every financial touchpoint including wealth management, forex trading, payments, insurance, and easy lending.
Traditional sectors that used to be the mainstay of the landscape are now being disrupted by SaaS technology. Case in point, we are witnessing the emergence of Banking-as-a-service (or BaaS) that aims to drastically improve the customer experience all at reduced costs. Even as banking customers continue to benefit from “easy banking at their fingertips,” technology is only expected to get even more intelligent about understanding customer needs. In fact, it’s fair to say that technology-driven innovation will become a key market factor that will drive future profits and revenues of the financial sector.
So, what is next in store for financial services companies?
A 2018 research study by, Northwestern Mutual revealed financial security as the leading component for a positive mindset among all humans for as many as 87% of the respondents. Emotions like security can have a huge bearing on customer experience (CX) and on how consumers invest their money.
For their part, financial service companies can augment the individual's emotional quotient with the right CX tools that can combine technology with the human touch. Be it personal finance or wealth management, a one-size-for-all solution does not work anymore for connecting with customers. Like the retail and hospitality sectors, banking customers seek the next level of personalization from Fintech providers.
As Duena Blomstrom, digital experience expert said, “emotional banking is the concept of moving away from thinking about features to more about customer feelings.” Can financial advisory tools combine technologies like artificial or machine intelligence with human emotions? Probably yes. One example of this trend is that Morgan Stanley has empowered its financial advisors with algorithmic assistants that provide financial recommendations based on the customer's individual life events or market changes.
Here are the 3 main benefits of addressing customer emotions in the financial services domain:
Financial empowerment can be the gateway for individuals to experience personal joy and satisfaction regarding their finances. Disempowered customers can often have a sense of fear and would be reluctant to make crucial decisions regarding their finances.
Financial empowerment is not just about having enough savings to cover expenses but also about having a sense of confidence in current and future finances. To build this emotion, include customers in their financial planning and encourage them to make good financial decisions.
Going by the finding of the “Four Pillars of New Retirement” report, only 46% of Americans feel confident about their post-retirement savings as compared to 58% before the 2020 pandemic. Be it to manage retirement expenses or credit card dues, financial peace of mind is crucial for developing better spending habits and money management skills and making smarter financial decisions.
Of course, long-term financial instruments like retirement savings, emergency funds, insurance, and pensions are designed for delivering financial peace of mind. These "peace of mind" goals need to be flexible and adapted to individual lifestyle choices and their current financial situation.
A Fidelity survey reveals that in general, women have lesser financial confidence as compared to men. Olga Miler of UBS Wealth Management talks about the impact factors like the “wage gap, longer lives, and career breaks” can have on any woman’s financial confidence.
All in all, financial confidence is a powerful emotion that does not stem simply from a high-paying job or career but from having the skills for financial sustenance even in economically uncertain times. Financial confidence can be developed through sustained measures like early life savings, financial literacy, career break and its impact on finances, and so on.
The role of the financial services company is to plug the gaps in the average consumer’s knowledge of financial opportunities and provide them personalized, carefully curated, highly topical, savings and investment options that are designed to help them achieve their personal goals. The financial services company of the near future will have to do this by leveraging technology to make the investment landscape accessible, transparent, and manageable for the average customer.
Previously known as Simple2Trade, Finnext is an end-to-end technology platform provider that goes beyond the functional attributes of financial products to provide a complete user experience for its financial services customers.
While most Fintech platforms cater to functional benefits like providing a unified CX or easy integration into existing infrastructure, Finnext differentiates from its competitors by allowing the financial services companies it serves to enable a strong sense of emotional benefits in their end-customers including financial empowerment, peace of mind, and confidence.
Here is how Finnext enables that:
Through continuous innovations and customer focus, today’s financial services companies are striving towards creating an emotional connect with their customers. Technology-driven trends like BaaS and CX tools are dominating the ever-changing financial services domain. Fintech disruptors can no longer grow or compete in today's environment without addressing customer needs at various touchpoints beyond the merely transactional.
As a financial solutions provider for the future, Finnext is poised to delivering exceptional technology options that go beyond functional attributes and features. Want to know how you can explore more digital possibilities? Contact us today or request a demo.