MAR 10, 2023
Achieving Higher Lifetime Value for Customers
Reading time: 2 min
OWINTALK | BEHIND BUSINESS, BEYOND NEWS
Objectway recently participated in the most recent Arena event on Digital Integration, which brought together leading voices and players of the financial services community to discuss the major challenges and future opportunities within the industry. Improving the customer journey has emerged as one of the top priorities at board level and its importance has been well highlighted of late. Gartner reports that more than 80% of Financial Institutions will primarily or exclusively compete on customer experience. End customer research shows that 25-30% may switch to a different firm if important touchpoints such as client portal, and reporting are not improved quickly. It’s no wonder then that customer experience will long be a critical competitive differentiator.
Objectway shared insights on how firms could achieve ‘Higher Lifetime Value for Customers’ and stressed the importance of a seamless personalised journey to provide real value in terms of customer experience. Customers expressed a strong desire to improve their current hybrid offering and underlined the need for a more dynamic portal and personalised interactions with their wealth managers.
Applying the Innovation Diamond for long-term value creation
Driving from customers’ current needs and demands, Objectway introduced the Innovation Diamond principle at the core of our speech, showing how the four areas of Value Creation – notably Experience, Offering, Configuration and Sustainability – are interconnected to generate successful innovation.
To be client-centric and achieve desired outcomes, it is important to focus on creating a seamless hybrid experience, that is user friendly and aligned to client lifecycle management. This involves implementing an operating model that maximizes productivity and efficiency by managing all client-related activities and maintaining conscious relationships.
The second element of innovation involves configuring a frictionless journey for the client through technology innovation and evolving the business operating model, while the third element focuses on personalising the experience to meet the unique needs of each client, including aligning investment solutions with profitability and creating social and environmental value over the long term.
All this to be delivered within a sustainability framework to help businesses meet clients’ future needs and achieving financial returns.
The main challenges to Sustainable Digital Innovation
Recent research highlighted a number of key areas that were inhibiting change.
Challenges to providing efficient processes for enhanced customer experience arise first and foremost from the burden of legacy IT architecture, which leads to excessive data re-keying, reliance on multiple disparate systems and resulting manual errors and significant time wasted on administrative tasks by people who could be adding value to their clients (if these tasks were automated). However, over the next 12 months, more than 7/10 firms intend to change their legacy IT systems, indicating a positive outlook for change.
Another obstacle to change is the ability of firms to actually resource any change and have the right level of expertise available to do this. In Objectway’s experience, successful change projects have been a result of a true partnership approach where skilled resources are leveraged as effectively as possible between partners who are both invested in the end goal i.e.: successful project completion and successful ongoing relationships. The need for a cultural shift was also highlighted and one way to accelerate this could be the sharing of quick wins that could be achieved through incremental modular change.
What does the wow look like?
Digital transformation could enable the wow factor for customers in a number of respects. For example, by making hyper personalised reports/educational information available on the customer portal, automating many back end processes to allow more time for the Investment manager to actually add value to their customer. Indeed, research shows that as technology improves, customers are actually much more likely to speak to their firms about important investment decisions.
Objectway discussed a real life case study on sustainable Innovation in operation to demonstrate the impact digital change and successful integration of systems is having on customer experience and the resulting business metrics for Wealth Management firms here and now.
Our client has seen doubling of digital engagementa as measured after implementing a dynamic client portal which has also led to a significant increase in client satisfaction as measured by a positive NPS score. Effective digital change has also resulted in an improvement of front office effectiveness as measured by more than 25% more clients per front office professional (largely due to automating processes). The future outlook for improving lasting value for customers is very positive if firms can navigate the common challenges they are likely to face.