Now that you can do everything online, it doesn't matter whether your bank has a branch close by, or at what time you choose to make your transfers. It is not surprising that the finance and insurance industries are global leaders in digital transformation.
The financial and insurance sector is at the forefront of the global digital transformation movement; however, not without challenges.
Despite its forward-looking digital strategy, the industry is under great pressure. A study by NTT DATA, a global business and IT service provider carried out at the beginning of 2019 reveals among 471 executives in the areas of banking, insurance, brokerage, asset management, and credit card & payment in the US, UK, Germany, Spain, and Japan:
More than 80% of respondents said they perceive technology companies such as Amazon, Apple, Google and Netflix as the main competitors, as these platform-driven companies are changing customers' expectations in a lasting way.
85% of the companies surveyed, therefore, believe that a digital business platform also represents a significant opportunity to reposition the company. In particular, if they guarantee the customer not only fast and simple digital experiences, but also the existing customer data can be used to optimally adapt services and new products to the customer and to submit personalized offers.
The study makes clear: The majority of financial and insurance companies worldwide believe that digital business models not only contribute to providing customers significant added value through tailor-made offers but also meet their expectations of a smooth and accessible customer journey in a sustainable manner. But what exactly are these expectations?
What customers want
To understand what customers expect from your company, you first need to understand which routes your customers choose to take on their journey to the product. As i discribe in my book, "Digitizing the Customer Journey" which phases the prospective customer goes through before he becomes a customer:
Identification of needs (Awareness)
The interested party is made aware of a product through an online campaign on social media.
Search for information (Favorability)
For further information on the product, the user is directed to the company homepage, where the product is presented comprehensively in words, pictures and by means of a product video.
Evaluation of options (Consideration)
In order to make sure that the product fits their needs, the prospective customer visits additional online sources, such as comparison and rating portals, or searches for more information on social media.
On the basis of the information gained, the initial interest has changed into a concrete request for purchase. The customer orders and pays for his product online through a retailer or the online shop of the company.
Post-purchase evaluation (Customer Relationship)
Based on customer data there are many opportunities (invitation to product evaluation, newsletter, coupons, offering useful additional products, customer service) to build a relationship with the customer in order to increase customer satisfaction and offer him valuable added value even after the purchase.
Digital business models offer you a variety of possibilities to communicate positively with the customer throughout his journey and thus meet his expectations with regard to as many digital information and purchase channels possible. A digital enterprise platform manages this diversity of information and data flows successfully.
So is it simply a matter of integrating the digital enterprise platform into your existing business model?
Yes and no. According to the participants in the NTT DATA Study 2019 mentioned above.;
... 61% plan to break away from traditional business models to compete with platform-driven companies like Amazon or Apple.
... 52% want to retain their traditional full-service model.
... 17% want to focus on their best products and resell them through partners.
... 14% are considering developing into a marketplace themselves, becoming i.e. a retailer of products of other service providers.
As you can see, the introduction of digital business models does not go without change. But a digital business platform also makes it possible to map different business models in a single technical system without having to replace existing core systems. Nevertheless, digital transformation challenges you to realize where your company's core competencies lie. In the international finance and insurance industry therefore, there is an increasing focus on the best products and specializing as a supplier or distributor.