Impact of Failing to Meet Customer Needs
78% of financial services companies believe that a failure to meet customer needs will result in a loss of revenue; 77% anticipate a decline in number of customers
Almost one third of Financial Services organizations worldwide believe that the failure to innovate and keep up with evolving customer needs will have the biggest negative impact on their company in the next five years, according to the new global study, “Innovate or Perish”, sponsored by Automic Software and conducted by Vanson Bourne. This concern is shared by 30% of Retail organizations and 37% of Telecommunications companies.
Methodology and Survey Demographics
The study surveyed a sample of 400 business decision makers (BDMs) and 4,000 consumers in the U.S, France, the U.K. and Germany (100 BDMs and 1,000 consumers in the U.K). Alongside Financial Services, respondents spanned three other verticals: energy and utilities, retail and telecommunications.
The vast majority of BDMs in Financial Services companies also believe their organization will suffer if their business fails to adapt in tandem with technical change within the next year. Some 78% forecast a reduction in revenue if they fail to evolve, 77% anticipate a decline in the number of customers and 69% expect international operations to decline.
Lack of Technological Leadership in Finance
The survey also highlights that just 17% of BDMs feel that their organization is on the cutting edge of technology (albeit 5% above the telecommunications sector); further, only 18% feel their organization has kept up completely with changing customer demands (1% less than the retail industry and 7% ahead of the telecommunications sector).
“This survey highlights the growing importance of utilizing technology—especially business automation— as a key instrument in delivering innovation and change in the finance sector,” says Chris Boorman, Chief Marketing Officer, Automic. “Those Financial Services institutions that don’t embrace new technologies risk permanently damaging customer relationships and revenue streams as they fail to meet market needs.”
Customer Expectations Driving Innovation
A recent Gartner study predicted that customer experience and expectations would now be the new competitive battlefield, forcing organizations to become more innovative and creative. Gartner argues, “With an overabundance of alternatives and ubiquitous access to pricing and product information, consumers have little reason to remain loyal to a particular brand. To narrow the capabilities gap in customer experience, organizations must implement new tools, new people and changes in culture.”[1]
Gartner’s predictions align with the findings from the Automic Innovate or Perish study. It shows that innovation is as important to consumers as it is to financial services organizations: 84% of consumers say it is important that the organizations they buy from are innovative in the goods/services they offer, while 79% think it is important that the organizations are innovative in the way they interact with the customer. Lastly, 93% of UK respondents state that their use of an organization would decline if they failed to meet their needs as a customer.
Boorman concludes, “As Gartner has stated, ‘Growing business will depend on your ability to deliver convenience and delight consumers in today’s connected economy. The rules of competition have changed; the battlefield has shifted’ [2]. As such, we believe the only response to increasingly technological complexity and the multitude of customer demands is automation. The strategic application of a business automation program will enable organizations to dynamically and proactively engage with customers – ultimately increasing competitive advantage and bottom line.”
Additional Key Survey Findings
Other key findings include:
- A mismatch exists between consumer expectations and financial services companies’ engagement plans.BDMs in financial services companies believe that the priorities for customers when they engage with the organization online are speed of service (cited by 58%) and personalization (cited by 43%). However, the overriding priority for consumers is the price of good and services (cited by 62%), with speed trailing at 54% and personalization cited by only 14%.
- Regulatory challenges are crippling financial services innovation. As a heavily regulated industry, it comes as little surprise to find that 43% of financial services companies believe that failure to innovate to keep up with evolving regulatory challenges will have the biggest negative impact on their company. This regulatory hurdle compares with 26% in retail and 32% in telecommunications.
- Lack of budget is less of a barrier to innovation in financial services than in other verticals.Some 49% of financial services organizations cite budget constraints as being a barrier to innovation, compared with 64% in the energy and utilities sector and 62% in telecommunications.
- Customer service innovations more of a priority for financial services companies than other sectors. 44% of financial companies are looking to innovate customer service over the next year, compared with 27% in retail and 28% in telecommunications.
[1] Gartner, Gartner Predicts a Customer Experience Battlefield, December 18, 2014 ,
http://gartnernews.com/gartner-predicts-a-customer-experience-battlefield
[2] Gartner, Gartner Predicts a Customer Experience Battlefield, December 18, 2014 ,
http://gartnernews.com/gartner-predicts-a-customer-experience-battlefield
