Why Change Management Should Be Top Priority in the Financial Sector

Changes in the banking sector require leaders to have a clear vision and an innovative mindset. Change management tends to be a top priority.

We had a look into what these big changes in the financial sector are, conducted a marketing benchmark and discovered a few trends. What do (private) bankers have to do, so they don’t get left behind?

Allow us to share our vision about private banking.

Technical trends

Robotics

A lot of things are being automated these days. For example: Administrative tasks are inherent to most processes within a bank. They are essential for the proper functioning, but require a lot of time and energy from employees.

Due to the complexity, they are often difficult to integrate into standard IT applications. Robotic Process Automation (RPA) is a fast and simple software that automates administrative and repetitive tasks. We see a trend that more processes will be automated or outsourced.

A report by McKinsey (2017) predicts that by 2030, around 800 million jobs could be lost worldwide to automation. BUT the report also states that new jobs will be created as well. There will be opportunities for people to switch careers.

Banks can choose to invest in people, since they still play a crucial role in a customer relationship. Robots will never have the emotional intelligence people have.

Mobile first / platforms

Banks are increasingly transforming into a platform. One where supply and demand come together and where banks as a financial service provider ensure that customers receive the optimal service based on their profile.

Banks will not be product providers, they mainly become service providers. However, banks will always be there. Especially when it comes to large business services, they are indispensable. But things will change, that is certain.

According to KBC: “The customer will always be able to choose through different channels, when contacting a bank: a bank office, a contact center, a smartphone …, but KBC is fully committed to digital applications to support human contact.

The customer will indicate the pace of the changes, the technological developments will indicate the direction and the possibilities.”

Fintech

Fintech is a contraction of the words financial and technology. It is a collective noun for new technologies and innovations that will compete with the traditional financial payment methods and services. To give some simple examples:

• With PayPal you can just install a one-click payment authorization
• Bux is an investment app that brings together investment, gaming and an online social community. Many people (from the classic investment world) did not believe in the app but it turned out to be a success

These Fintech companies, where new payment systems or blockchain technology are applied, turn the banking market upside down. Bankers need to invest heavily in innovations or need to close partnerships with Fintech companies.

Society trends

Older population and a bigger urban concentration

Since 2008 more than half of the world population lives in cities. People also are getting older: the group between 15 till 64 years old will continue to grow for decades.

Nowadays bankers already must take into account the future reality of another demography and a more urban generation. Bankers need to develop new products and services for this target demographic.

Precision banking

Precision banking creates a personal and contextual service and offers a real-time, panoramic view of the customer – capturing micro moments from the customer’s profile, social media posts, location and credit rating.

Systems quickly analyze the data and then pack it up to deliver precise actions to the customer, wherever they are and however they want to be reached.

Today’s customer is looking for a very specific service that is relevant, efficient and catered to their personal needs. They are expecting a highly customized service and if possible, within their budget.

Conclusions

• To go along with technology trends, banks need to invest in people, improve their IT processes or build partnerships with Fintech companies
• Today’s bankers need to take into account: highly customize their product or service. Be aware of the flow you set up over the entire customer journey. Which customer journey do they follow? Is your communication drawn up on this?
• Be aware that new personas are coming up. Ask yourself the question: who are these personas? What do they stand for?
• Depending on the behaviour that the customer shows at a touchpoint, marketing automation will enable you to communicate with customer in the right way.