A common and often overused motivational phrase is that it’s “never too late”. This may be true for many things, such as my dream of becoming a rally driver, or writing a murder mystery before I’m 60. It’s a phrase we’ve come to rely on to inspire us to do what we’ve procrastinated about for too long. Yet, in some cases, it actually is too late. I work in financial services and financial technology. I’ve seen instances of costly “too late” scenarios that would make your toes curl.
Digital transformation is another timeworn phrase, though I still think it’s a good one. Financial institutions have largely come to terms with what it means and why it ought to occur. Accenture’s Technology Vision 2020 underlined executives’ recognition of its importance, with 76% agreeing on the need to “dramatically reengineer the experiences that bring technology and people together in a more human-centric manner”. Has recognition of what digital transformation means inspired and motivated FIs to get their act together before it’s too late? The jury is still out.
In my capacity as a commercial director, I see many procrastinators. There are companies who leave digital transformation (or change of any description) to the last minute, when all around them have taken a foothold in the market. That’s too late. There are companies who believe they operate digitally because they disposed of the office printer. They say they’ve transformed into a fintech company, but they really haven’t. There are companies who say they are customer-centric, but truly fail to empathise with the financial choices we face every day.
We work with mortgage providers here at ieDigital. An example of late-in-the-day thinking is when it comes time for people to renew their mortgage. I remember the first time I did it – what a nightmare! It was such a convoluted process, I felt blind and uninformed. I scoured the internet, asked friends for advice, and eventually switched to a different mortgage provider with a better deal. I consider myself quite savvy when it comes to personal finances, but what was really missing from my experience was a personal touch. My mortgage provider at the time was practically invisible. By the time I heard from someone – who was charming, chatty and reasonably informative – I’d already switched. It was too late.
Had my mortgage provider created a better experience for me, I dare say I would have stayed because I’m that type of person. I reward customer service with my loyalty. Give me the means, the knowledge and the motivation to stay with you, and I probably will. I don’t believe I’m alone in thinking this way. Millions of customers simply need a helping hand when it comes to renewing their mortgage. With about 70% of consumers ending their relationship with a company due to poor experience and customer service, this is an area worth paying attention to.
More (and better) information leads to more (and better) decisions
The solution is simple. By reengineering the customer experience, mortgage providers can retain customers instead of lose them. Removing friction by streamlining processes is a profitable exercise on many fronts. In my last post I highlighted the fact that customers are willing to adopt self-service mechanisms, where they have more control over what they can see and do. This leads to more informed financial decisions, and inevitably fosters closer ties with the mortgage provider. It’s a way to cut through misinformation, unnecessary complications, red tape, and the worst communication sin of all: silence.
The FCA published research on mortgage switching in 2020, underlining the need for customers to be better informed: “Consumers could become better engaged with the switching process if given the right information at the right time.” And this is where technology comes into its own. The reason we adopt technology and go through a process of digital transformation is to:
- consolidate working practices
- automate what needs to be automated
- create more dynamic customer experiences around onboarding and access to information
- be a better, more profitable, more connected business.
If everything leads to a single-pane-of-glass journey for the customer, then it’s been a transformation worth going through.
We recently published an e-book that covers mortgage product transfers, and the three reasons why retention teams fail. It includes the benefits of self-serve technology, customer confidence and loyalty, and the gains to be had from reducing complexity. You can download it right here.
Leaving things too late in the day to make a difference in a customer’s life is fruitless. A customer is as much a part of an FI’s digital transformation as an updated tech stack. Recognising this is tough for many executives, who see customer happiness as an outcome rather than a motivator. Once you begin to see the balance between the human touch and digital transformation, you will see the business benefits, and your customer retention team will thank you!
ieDigital is an exclusive sponsor at this year’s Digitalisation & Self-Service Banking Conference in London, 24 March 2022. In my presentation, I’ll discuss the benefits of digital transformation in more detail, and hope to see you there. Get in touch if you’d like to meet.