The rapid proliferation of internet-enabled devices, omnipresent high-speed connectivity, and the accelerated shift from websites to applications has significantly impacted consumer buying behaviors, particularly among the younger generations and “digital natives.” In last few decades, we witness the rise and tremendous growth of firms which embedded themselves in the daily lives of these digital natives. Companies like Amazon, Netflix, and Facebook have not just led to an evolution in their respective fields, but have drastically altered retail, media, and social communications.

Such transformations have significantly impacted consumer behaviors and expectations. In nearly every industry, people now expect superior customer experiences and are not afraid to switch brands or providers to get them. Financial services (FS) firms are not immune to these pressures.

The pandemic’s push to digital

COVID-19 has amplified digital adoption. For many, it has brought about a first-time shift to online channels. People are also more comfortable embracing digital throughout their lives. For instance, an increasing number of consumers say they will continue to shop online after the pandemic, maybe even more than they do now.

Driven by fluid experiences from other sectors like e-commerce, financial services customers now demand more personalized services and experiences, and are willing to look for smarter, easier alternatives. This is not optional anymore, and will make or break market share: Firms that have a well- defined customer experience and personalization strategy will be able to keep up with the increasing demands of consumers while staying ahead of their competition. For example, while other sectors are shifting to modular products, commoditized offerings are still common in the banking and financial services industry (BFSI). Firms that focus on providing better, more fluid customer experiences will become the preferred providers.

Enabling forces are in place to create better customer experiences

The rapid pace of digital adoption, along with proliferation of sensors, has triggered a flood of heterogeneous data from different sources and platforms, enabling companies with widespread, real- time data collection. This data, when pushed through advanced artificial intelligence, machine learning, and data analytics engines, can provide valuable insights into customer behavior and preferences, allowing firms to form a single view of their customers.

FS firms have been investing heavily in new age technologies like artificial intelligence, machine learning and data analytics, to support their digital transformation journeys. Yet many firms have been unable to reap benefits proportionate to their investments, and have been unable to provide customers the personalized experiences they want.

So the question remains: How can firms best utilize the massive amounts of data and the advanced technologies at their disposal to create value for their customers?

Strive to create mutually beneficial value propositions

There has been exhaustive research on how concepts like gamification and the principles of behavioral economics can be applied in business to create value propositions that are mutually beneficial to customers and the business. Some firms within the BFSI industry have successfully delivered on these concepts by building a strong understanding of their customers’ behaviors through real-time data and advanced analytics. Equipped with these insights, businesses gain the ability to deliver highly contextual messages to their customers – at the right place and time – to nudge them towards favorable outcomes, like improved financial wellness.

Customers are willing to share more personal data with financial services firms, but they want something in return: highly personalized experiences. They expect to receive a similar level of personalization, or maybe even more, than what is delivered by likes of Amazon and Netflix. The time is ripe for FS industry players to ask, How can we effectively nudge customers to achieve mutually beneficial behaviors?

Future of customer engagement within the financial services sector

The concept of customer engagement within banking and financial services has already evolved from providing traditional persona-based offerings to more personalized products and experiences, with the goal of achieving differentiation in the market. New marketplaces and models (such as pay-as-you-live), which are seeking to redefine customer experiences, are gaining popularity.

Which model will emerge as the new standard for customer engagement across the BFSI? Will there be only one?

Find out more in Wipro’s upcoming report on hyper-personalization, in which we examine the changing landscape of customer experience in the financial services space, and imperatives for the incumbents.

Angan Guha 

CEO Americas

Angan is currently the CEO for America’s with direct management oversight on BFSI , E&U , Manufacturing, Hitech , and Canada region. He started his career with Wipro and has 25+ years of experience in the banking and financial services industry. He has held various leadership positions within the BFSI business unit and Wipro Infotech, and has lived and worked across Asia, Europe, and the Americas. In his last role, he was the Global Head of Wipro’s BFSI business unit, servicing 100+ clients across retail and investment banking, capital markets, wealth management, and insurance. He has worked extensively with CIOs of global banks, financial institutions, and insurance companies on their transformation agenda. Angan has a Bachelor of Engineering degree in electronics from the University of Pune and currently resides in New York City.