Failure to connect to data-driven devices and offer customers individual, personalised experiences could result in many banks and insurers falling behind ~
Nearly a quarter (24 per cent) of global financial services organisations run the risk of falling behind competitors because legacy systems are preventing them from offering customers fully personalised services, according to research undertaken by Marketforce. The study was conducted on behalf of strategic business applications provider Pegasystems Inc. (NASDAQ: PEGA) and Cognizant (NASDAQ: CTSH), a leading provider of information technology, consulting, and business process outsourcing services.
The study surveyed 500 financial services and insurance industry executives, across 56 countries, to examine the challenges and opportunities they face due to rapid technological change. The study found that, while the majority of financial services retailers have plans to use data from connected and wearable devices to build detailed personal profiles of their customers and their behaviour, nearly a quarter were unable to do so. Indeed, many of those without such plans cited the inability of existing legacy systems, such as customer segmentation tools, to use and interpret customer data as a barrier to offering fully personalised services, leaving them reliant on outdated customer segmentation tools instead of newer, cutting edge Customer Relationship Management solutions.
Data from newer, connected technologies, such as wearables, is playing an increasingly important role in enabling organisations to provide personalised offerings to customers, and the study showed that the number of retailers in the financial services sector intending to offer these products continues to grow. In fact, 38 per cent of survey respondents expect to use data from wearable devices to personalise their offerings within two years, with 68 per cent expecting to do the same within five years. Almost one quarter (22 per cent) also said that they expect to use data from connected cars for the same purpose within two years, with 59 per cent expecting to accomplish this within five years. Furthermore, 40 per cent expect to use data from these devices to accurately predict the individual requirements of customers within just two years, with 83 per cent expecting to achieve this goal within five years.
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Despite this, almost one quarter (24 per cent) of financial services retailers said they currently have no plans to offer customers full personalisation, citing the inability of legacy systems to cope with these new data sources as the biggest obstacle. Of these respondents, 79 per cent cited the lack of a single customer view as a barrier to offering full personalisation to customers, while 85 per cent cited the difficulty of processing very large data sets. Significantly, these respondents stated that the biggest obstacle to personalisation was the lack of availability of sufficiently rich customer data, with 88 per cent suggesting that their existing legacy systems are unable to connect to data flows from newer, connected devices.
Graham Lloyd, Director and Industry Principal of Financial Services at Pegasystems, said: “It’s never been more important for financial services organisations in the retail sector to understand customers, and personalise services to meet their needs. We live in an age where ‘Generation Selfie’ is king, and the expectations of customers across all sectors are increasingly influenced by the experiences they get from digital leaders such as Amazon and Netflix. For this reason, it’s critical that those in the financial services sector invest in technology that enables them to mine the rich seams of available data that can help them truly recognise their customers as individuals and personalise their customer journeys accordingly. Those that don’t could find themselves falling a long way behind.”