Why a digital-first approach is the way to go for financial services to ensure growth

New technologies have had a huge impact on the financial services market in recent years. The Middle East is racing ahead with digitalisation of financial services in line with the region’s national goals and is a strategy which lies at the heart of the region’s finance sector. Moreover, the region consists of more youth with almost 60 per cent of its population aged under 25 – a young, digitally-savvy and tech enabled economy geared for modem financial experiences.

A digital-first approach is clearly the way forward and one which empowers banks to become more competitive while providing consumers a pathway to their individual banking experiences, thereby boosting their services. According to a survey completed by Broadridge, more than 50 per cent of C-suite leaders in firms that have reached a high maturity level in their digital transformation journey, from the pandemic and beyond, have experienced an increase in revenues and profits as a result.

Additionally, more than 60 per cent of surveyed leaders reported that digitalisation has helped them make better decisions and improved planning.

In fact, at Gitex Global too, innovation in customer-centricity is one of the key areas of discussions that executives aim to have as businesses prioritise compelling, high-impact digital experiences. The focus on data and analytics to drive optimum experiences in this digital world will be a strategic part of these dialogues. Here, we take a closer look at why digital finance is the future and how financial institutions can approach modernisation to ensure growth.

Focus on customer experience
As companies in the financial services market continue to invest in digital transformation, the primary goal for most organisations is to deliver a user-focused customer experience that prioritises customer convenience. The Arab African International Bank for instance recently elevated its customer journey across all major touchpoints to drive user-centric digital banking and for its customers to have access to various financial services.

Moreover, branchless banking, neobanks and challenger banks are also on the rise and gaining strong foothold, all to focus on increased value addition for customers by addressing their needs. Meanwhile, financial institutions are pacing to stay abreast of customer expectations. While customer acquisition is vital, retaining a customer is even more important and one which has been proven to be less expensive. This aspect also makes customer journeys and experiences a key component in digital transformations. Hence, keeping pace with advanced technologies to meet modern user expectations remains vital. Customers will not take time to move to alternatives if they feel their journey is not satisfactory and others in the sector can better serve their needs.

Addressing customer Experience touchpoints
While focusing on improving customer experience (CX), there are several avenues a financial provider could take. Some of the areas they should play close attention to include, providing an exceptional first interaction, improving customer communication, and implementing personalisation through the user journey.

Exceptional first impressions to improve retention: First impressions generally can make or break the customer experience quickly and also impact customer retention. According to Hubspot, 92 per cent of customers would stop purchasing from a company after three or fewer bad experiences. When it comes to banks and financial institutions in particular, new customers are often required to provide a lot of personal information and documentation.

Digitising this first step helps improve CX by saving time and creating seamless processes during the initial onboarding experience.
To enhance the initial customer experience, the industry can digitise – a process for collecting customer data, way the organisation obtains and stores documents and data validation to ensure accurate information and completion of applications.

Improved forms of communication with mobile: Digital transformation offers many opportunities for organisations to improve how they engage clients. Tools like online and mobile banking can help reduce delays, minimise missed information and simplify problem solving and this reliance will only continue to increase.

Increased personalisation: Personalisation in CX plays a vital role too. Integrating personalisation into a digital transformation strategy can include both simple or more complex offerings. Personalisation for better CX includes – cross-selling and upselling additional products that are relevant to clients, pricing based on customer behaviour, utilising predictive models for loans and making loan, portfolio or policy recommendations.

Financial service transformation
The future of customer experiences across financial services is a mix of data, analytics and technology. Customer centricity with personalisation remains top of mind for most financial institutions, just as increasing operational efficiencies do across digital transformation journeys. As the financial services industry continues to evolve, organisations must focus on meeting today’s customer needs by creating a concise digital transformation strategy, deliver customer-centric solutions and differentiate themselves from growing competition.

Ahmad Saad is the country manager – UAE and Qatar at Liferay

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