What shapes customer engagement in the financial services industry?

Financial services was once home to a one-sided consumer and brand relationship. Now, that model has crumbled and new rules of customer engagement are in play. Rules dictated by the fact that today’s consumers are more educated and more able to access, act and benefit from information and opportunity than ever before.

The changes: from having to wanting

Traditionally financial service providers curated products that didn’t spark the imagination of most of their customers. Mortgages, insurance, credit card and savings accounts: all products that, for the most part, customers acted with in a transactional sense, with zero emotional engagement – and certainly little back from the providers.

Today this transactional model has vanished. Today’s consumer goes beyond shopping and instead reaches into research behaviours, examining pricing, benefits and loyalty guarantees when choosing who they partner with. The advent of the internet and device tech (computers to smart phones) has enabled this rapid change.

Simply put, more is expected of each and every company consumers choose to part money with – or to trust.

Is engagement the answer?

The challenge for financial services providers has been to develop a model of interaction that acknowledges the primacy of a consumer armed with knowledge and opportunity. Into this gap steps customer engagement.

Personalising conversations, pitching relevant products and services, creating the right context for valuable consumer interactions, trusting in data and harnessing technology to win transactions and trust: today’s financial services providers have a huge range of challenges to overcome to win business.

Engaging the financial services customer

To adapt and thrive in today’s consumer-centric world, financial services firms think differently about their customers and interrogate their own offerings forensically in order to keep pace with their audiences.

There are a few areas where most of the work to develop a new customer engagement approach has thrived in the industry.

We see greater value placed on creating a valuable customer journey. Knowing how a customer moves from, say, an internet search query to a mortgage purchase may involve multiple building bricks. Financial service providers engage across social media, through tactical ad targeting, foster proactive customer service and work through to pre-purchase services such as quotes and assessments, or even face-to-face interactions.

The move away from the cold transaction approach means that a sell is no longer just a sell, it needs to be more. A good example is the change in the way mortgages are sold. They represent huge financial and emotional investments from consumers, and place a demand on the engagement strategies of the firms that offer those products. Today’s consumer wants guidance, reassurance and, most importantly, a trustworthy partner to help guide them and counsel them through often tricky waters.

Fortunately for financial services firms, they own a huge amount of data. Successful engagement strategies will rely on this data which allows for accurate product targeting, well-informed marketing campaigns and the ability to unearth further data points around which to create loyalty messages and offers to keep the consumer engaged – and purchasing.

Next steps in customer engagement for the financial services industry

Looking across retail sectors, not just their own industry compartments, seems crucial for financial service providers looking to flourish in their customer engagement approaches.

And as new providers emerge to challenge the financial services orthodoxy, it’s more important than ever to create and grow the right conversations with consumers.

Speaking the language of consumers is a focus of the DMA’s Customer Engagement campaign, and we tackle this aspect of engagement – and more - in the financial services sector on 6 September.

Find out more and book your place here.