In 2016, a consumer research conducted by Fair, Isaac and Company (FICO) - a data analytics company based in San Jose, found that millennials are two to three times more likely to switch from their existing financial service providers. The reasons for making the switch are many but increased fee and negative customer experience figure at the top. Millennials behave differently than their predecessors, who unlike them, are willing to take their business elsewhere if the services provided are not up to the mark. Even if you manage to convert a millennial into a customer, it’s no guarantee he/she will stick to you forever.
All this can pose a great degree of challenge to financial service providers such as banks and insurance companies. It can put greater strain on operational costs and compels service providers to constantly upgrade their technology platforms to offer innovative services. While the scenario may seem bleak, it certainly isn’t so.
The Millennial is Socially Aware
Before we can understand what financial service providers must do to stay ahead in the game, let’s understand what drives millennials to sign up with a service or stay with the same provider for a long time? The millennial of today is twice as likely to use social media to research information on the products available. The parameters they consider while making a purchase decision are costs, ease-of-use, availability of service on multiple platforms, long-term benefits, and quality of customer service. The millennial prefers to interact with customer support on a digital channel rather than analog channels such as telephone or personal visits.
Fintech companies have a considerable lead against traditional financial service providers for the very reason that the former spend considerable effort in seeding information across digital channels – including social media.
Innovate, innovate, innovate
Fintech companies are constantly evolving and innovating to keep up with the expectations of their customers. This becomes the primary reason for a millennial to explore a non-traditional financial service provider.
On the technology front, fintechs leverage the power of technologies such as cloud to optimise their digital footprint. They are also leveraging big data to gain valuable insights into their customers. This allows them to create personalised features and products to consistently excite their customers. In contrast, traditional financial service providers are relatively slow to innovate – partly, bogged down by tight regulations imposed on them.
A winning customer experience is key
A winning customer experience is not just about resolving customer problems or queries when they arise. A potential customer begins his experience even before they make their first purchase. They evaluate their experience with a service across each stage of the buying process – awareness, consideration, purchase, retention, and advocacy. Having robust technology platforms and leveraging digital channels such as social media to deliver exceptional customer service can help service providers to stay lean and maximise their revenues. Such platforms can also contribute to an omni-channel experience to engage with the millennial customer effectively.
The financial service providers are faced with an immense challenge. To win customers and stay ahead of the competition, leveraging technology to its maximum use is a must. Social media and other digital channels also need to be leveraged effectively to continuously engage customers to deliver personalised services, customized offers, and a winning customer experience.
- By Pavan Chandra, Senior Sales Director – CX Applications at Oracle