Financial Services client behaviour has changed

Written by Frances Savage, FIS Worldpay Vertical Growth Manager Financial Services

PWC has released their Global Consumer Insights Survey 2020, this year showing a contrast in consumer behaviours before and after Covid-19 hit.

The results provide a view of how the customer journey across all industries has changed, and how different things still might become. Businesses need to understand how this new world affects all their touch points with the customer if they are to actively reinvent their own future and not be at the mercy of external events.

One of the four key insights emerging from the research is that digital engagement will need to be robust and diversified.

Companies need to ‘forge new strategic partnerships across the industry as the rise of direct-to-consumer platforms further fragments channels’.

It's important to consider that consumers increasingly expect the same levels of service, both in person and digital, from their financial services providers as they do from their food delivery services, retail services and services that lead in digital customer experience.

The growth of direct to consumer channels are a key trend and example of how the sector is impacted by consumer expectations for digital self-service methods. Below is some research around how this is playing out in insurance and wealth and asset management.

Insurance

Data from the British Association of Insurers shows a decline in traditional distribution channels in the insurance sector in the UK and the increasing growth of direct channels. As digitization continues to shape customers’ attitudes, insurers are being forced to rethink their distribution models and put a greater focus on D2C channels.

What does this mean?

Using aggregator platforms is an expensive distribution model and insurers will be looking to create their own seamless direct to consumer offerings through a seamless online purchasing experience. Direct insurers benefit from 70% lower sales and sales-support costs and an operations cost ratio on average 30% lower than that of multichannel players.

FIS Worldpay have a comprehensive insurance product offering for direct collection of premiums and paying out of claims, resulting in improved digital CX.

Wealth and Asset Management

Assets invested via platforms have doubled in the past 5 years. The self-directed channel is growing at 20% p.a. Of the ￡249bn in gross retail sale of funds in 2018, ￡108bn were invested via platforms. It’s clear that the same trend toward- self-service through D2C channels is playing out in the wealth and asset management sector, as modern investors seek seamless, digital purchasing experiences, rather than bank account transfers.

According to a survey of retail and institutional investors, 76% of participants stated CX was a contributing factor to manager terminations. In a world where performance is not the only contributor to differentiation, creating a positive CX including online purchasing of funds through a modern payment gateway can help firms retain customer assets.

What does this mean?

Earlier this year, McKinsey highlighted several opportunities for acquirers in the market, including targeting asset managers that are in the early stages of forming their own D2C offerings, and third party advisor platforms, in order to capture the growing segment.

FIS Worldpay have a product that meets this need. Beyond bank transfers – through card payments and tokenisation, open banking and mobile wallets. We can enable seamless and quick pay-out of funds/dividends to investors through Visa Direct and Bankout. And we can provide a market leading payment user experience through an easily integrated gateway solution with a suite of compliance products, so that investors can manage their own portfolios online.

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My name is Mat Everitt and I am proud to lead a team of spectacularly committed and expert professionals within the Strategic Sales Team at FIS Worldpay.

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