By Pascale Gara
It is the biggest challenge to financial services providers today and one they cannot afford to ignore: how to deliver a truly omnichannel approach to customer service.
They face a combination of heightened consumer expectations of consistent service across all touchpoints and the threat posed by the ‘challenger’ banks and Open Banking.
The Financial Conduct Authority’s Mortgage Market Review is also examining whether better technology can help consumers, including greater use of digital channels to deliver information and advice.
It is perhaps unsurprising, then, that digital transformation was one of the key topics at the Building Societies Annual Conference in London last month.
Delegates were told they had to target the whole customer journey with a clearly defined digital vision from start to finish, and an open and API orientated platform architecture.
It is a common call to action. In its recently published report “Who are you calling a ‘challenger’? How competition is improving customer choice and driving innovation in the UK banking market” PWC reiterated the point, saying: “To succeed, all banks must embrace new digital models…”
Digitally savvy consumers now used to conducting transactions for most things online rightly expect to be able to arrange a loan, mortgage or insurance, set up a new bank account, or manage an existing account via their mobile phone or tablet – and to be able to switch between devices. Call centres and in branch visits will increasingly be used only when the online approach does not work.
Integrating digital and physical channels into a single, seamless experience for the consumer brings many benefits. It enables analysis of customer activity to target suitable products and services, which will aid client retention and ultimately help the bottom line.
So why are so many providers still playing catch-up with digital transformation?
The sector has seen huge changes in the decade since the financial crash; from the UK’s six largest banking groups having an 89% share of the current account market to a new age with much less brand loyalty and the new breed of ‘challenger’ banks largely targeting niche services.
Many banks and building societies are having to replace legacy IT systems and restructure their business model to transfer resources from traditional bricks and mortar to online platforms, while facing greatly increased regulation and profitability pressures.
Numerous smaller FS providers with a limited budget and limited space on their boards are having difficulty finding the talent needed to guide them through the digital transformation process.
However, executive search consultancy HW has long established relationships with highly experienced digital transformation specialists from the financial services and online retail sectors who offer advisory services as consultants or non-executive directors and we can put you in touch with them.
Rob McWilliam has 25 years of experience in finance, strategy and digital leadership, with most recent positions including Vice President for Amazon UK and Finance Director at Asda Stores Ltd. He is currently building a portfolio of non-executive and advisory interests including digital advisory services across the retail and financial services sectors.
Rob said: “Digital has become an extremely broad topic, ranging from data analytics to artificial intelligence to cyber security.
“Having digital expertise in the executive team is a necessary condition for successful transformation, but it’s not always sufficient. External advisors and/or NEDs can bring real-time insight on innovation from other sectors that are, in some cases, innovating faster than financial services.
“Innovation rarely happens in a ‘light bulb moment’ but benefits from the widest possible stimulus and an open mindset, something that digital advisors can help create.
“Boards should be very clear about their most relevant digital gaps, and select digital board members or advisors who bring subject matter expertise in these fields. This might involve having multiple experts, leading some organisations to create multi-discipline advisory boards rather than appointing digital NEDs.
“If there’s only space for one advisor, the critical selection criteria should be the relevance and diversity of their network, providing access to subject matter experts across the digital spectrum.”
Mark Stevens, Managing Director (Consumer Credit Division) at Provident Financial, said the recent appointment of two digital NEDs to its Board had proved ‘invaluable’.
He said: “Being digital is not something that is simply the day job of a handful of people in IT, marketing, and operations, but needs to be part of the core skill-set of the entire organisation – now, not in the future.
“Here at Provident over the last year we have hired two new Non-Executive Directors with outstanding digital experience. Their input as we continue on our digital transformation has been invaluable, not just in terms of helping shape the strategic discussion at the main plc Board, but also supporting Executive decisions in a hands-on way through a Digital Advisory Board.”
HW is currently working with a number of clients to offer strategic advice and identify the digital expertise they need – please contact me for an informal discussion about your requirements if this is of interest to you.
Pascale Gara is a Consultant in the Chair & NED Practice at HW. Contact her at firstname.lastname@example.org or +44 (0) 781 258 2486 for a confidential discussion.