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Facebook CEO Mark Zuckerberg introduces a new messenger platform on March 25, 2015.

In late 2016, many financial services companies were crawling reluctantly into the digital future, realizing they had little choice if they were to earn the business of tech-savvy, yet fickle, millennials.

There were, however, incremental positive changes at some institutions even as the industry, as a whole, had been sluggish in embracing digitally native customers.

L2’s latest study, published in July, found that features such as chat bots, mobile-only applications, social media outreach, and TouchID are what millennials have come to expect from all brands, and are now becoming cornerstones of financial services companies’ digital offerings.

Read: Aspiring financial advisers should learn these 3 things as soon as they can

Regardless of a basic leveling of the playing field, however, future digital success is moving further and further into the land of innovation. That suggests lessons even for smaller companies as they look to develop their customer-facing technical capabilities and attract new customers. Improving customer-facing technologies will be a key for financial services brands, regardless of size.

Courtesy photo

Liz Elder.

It is no longer feasible for financial services brands to simply have an aesthetically pleasing “brochure” website and a mobile-friendly app. The brands that are succeeding, including the pure-play Fintech firms, are the ones that are making digital investments in data-driven, personalized interactions.

The brands that are creating the most buzz, winning the most customers, and gaining positive brand reputation have two common attributes: They are using technology to provide speed along with service, and demonstrating value in every brand interaction.

Read: The software financial advisers say they can’t do without

Lemonade, a home and renters’ insurance technology firm based in New York, made waves in the marketplace last year when it broke world records by processing a claim in three seconds. Lemonade uses only a mobile app platform, with two AI bots that facilitate the enrollment and claims processes. There is no person-to-person interaction.

Additionally, Lemonade pledges to give back any left over premium dollars to the charities the customer chooses. Lemonade’s use of millennial-friendly attributes appears to be working: the company reported in June 2017 that 69 percent of its new customers moved accounts from the top five property and casualty insurance firms.

Meanwhile, under the premise of increasing value by offloading simple customer requests, 60 percent of leading wealth management institutions have expanded customer service efforts to include Facebook

FB, -1.82%

Messenger. Many brands tout their ability to “respond instantly.” In testing the response time of these institutions, however, most queries received no response at all.

Video: Why financial advisers are late adopters of new technology

A brand cannot deliver value to customers by making empty promises and dropping customer engagement opportunities. The results also highlighted the lack of a fully integrated customer service strategy. Deutsche Bank

DB, -3.52%

 stands out from the pack, embracing the opportunity to respond to the customer with actionable answers that lead to online resources.

Speed and value are only part of the equation. The next iteration of financial services innovation will be driven by companies that use technology to provide instantaneous results, address all customer needs, and foster customer trust that helps sustain and deepen relationships.

Where does that leave financial services brands now? At the tip of a digital, millennial-made cliff. If they don’t continue to invest and innovate, they risk falling off.

Liz Elder is a senior associate at digital research and benchmarking firm L2 Inc. Email her at

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