Embracing digital micro transformation: shaping the future of financial services marketing

Digital transformation in financial services

The financial services industry is undergoing a fundamental shift – the age of the customer has arrived. With the rise of mobile devices and the internet, customers now have unprecedented control over their interactions with financial institutions. They expect seamless experiences, personalised services, and consistent engagement across all touchpoints. As marketers in the financial sector, the challenge is no longer just to sell products; it is to solve for the customer.

In a webinar hosted by Steve Renshaw, co-founder of Ratio, and Doug Morris, the strategy director at Ratio, we discussed the concept of micro transformation in financial services marketing.

Micro transformation refers to a departure from large-scale, multi-year digital transformation projects and, instead, focusing on incremental changes that lead to significant improvements. It entails examining organisation’s KPIs, team structures, capabilities, and aligning marketing efforts around the customer’s needs.

The Age of the Customer

The digital age has revolutionised consumer behaviour, and financial services are no exception. Customers now demand experiences tailored to their preferences, akin to the seamless interactions offered by their favourite tech companies and media streaming services.

This age of the customer requires a shift in focus for marketers from traditional campaigns aimed at selling, to campaigns aimed at solving customer pain points.

As technological and economic forces drive customer expectations, financial services marketers must adapt their strategies. The key lies in delivering consistent and personalised experiences across all channels and interactions. Brands are being evaluated against the standards set by digital-first disruptors in the industry and other sectors. Consumers expect financial services providers to meet their individual needs and preferences just as effectively as their favourite big tech companies do.

The pitfalls of technology-centric transformations

To meet these evolving customer expectations, financial institutions have invested significantly in technology-driven transformation projects. However, a myopic focus on technology implementation can lead to underwhelming results. Deloitte reports that a staggering 70% of bank transformation spending in 2018 was wasted, amounting to $900 billion.

The problem lies in an excessive emphasis on getting technology in place without adequately addressing supporting changes in working practices, organisational structure, KPIs, objectives, and company culture. Technology alone does not guarantee success; it is merely an enabler. The key is to develop a customer-first ethos that guides the application of technology to create value for both the consumer and the business.

Agile marketing as the foundation for micro transformation

Agile marketing offers a transformative framework that empowers financial services organisations to respond swiftly to customer feedback, iterate frequently, and embrace intelligent risks. By conducting frequent market tests and incorporating customer feedback, organisations can gradually improve their marketing efforts and align them with customer expectations.

The core principles of agile marketing include focusing on delivering incremental value, adjusting strategies based on customer feedback, and embracing experimentation and learning from failures. Agile marketing is not just a methodology; it’s a mindset that encourages adaptability and innovation.

Overcoming challenges in micro transformation

Micro transformation comes with its set of challenges that must be addressed to drive successful change.

Tech integration:

Achieving seamless integration across middle and back-end systems is a daunting task. Many financial institutions have existing transformation programmes that have been underway for years, leading to gaps in integration.

Data accessibility:

Data is the lifeblood of customer experience improvement. However, data is often locked in silos, making it challenging for marketers to access the right information to make informed decisions.

Misaligned KPIs:

Incentive structures and KPIs in financial services organisations may not prioritise customer-centric objectives. Focusing on short-term deliverables and internal goals instead of customer experience metrics can hinder transformation efforts.

Risk-averse culture:

The financial services industry is inherently risk-averse due to its focus on discipline, consistency, governance, and regulations. Embracing digital transformation requires a cultural shift that embraces intelligent risk-taking and experimentation.

Unlocking the power of Artificial Intelligence (AI)

To deliver personalised experiences at scale, financial services marketers must leverage artificial intelligence and machine learning. AI can analyse vast amounts of data to identify customer segments and create personalised experiences that resonate with individual preferences.

AI has already been integrated into marketing tools, allowing financial services organisations to implement predictive personalisation. These tools can analyse customer behaviour and preferences to deliver relevant content and offers, even before reaching the ultimate tech nirvana.

Breaking down silos and fostering collaboration

To deliver a unified brand experience, financial institutions must break down silos and foster collaboration between different teams. By involving the right people at the right time, efficiently gathering and acting on their feedback, and creating direct connections among teams, the sense of otherness between silos can be reduced.

Creating a culture of innovation

Shifting to a culture that embraces experimentation and intelligent risk-taking is crucial for successful micro transformation. Leaders must create a permission structure that encourages employees to take calculated risks and fosters a culture of innovation from top to bottom.

Partnerships with FinTech for accelerated transformation

While partnerships with FinTech companies can accelerate innovation, they are not a one-size-fits-all solution. Organisations should focus on fostering a culture of experimentation and continuous improvement within their teams while leveraging FinTech partnerships to complement their transformation efforts.

What’s next for financial services providers?

In the age of the customer, financial services marketing must adapt to meet evolving consumer expectations. Embracing micro transformation allows organisations to make incremental changes that lead to significant improvements in customer experiences.

By leveraging technology, breaking down silos, and fostering collaboration and a culture of innovation, financial services providers can position themselves as industry leaders in the era of the customer. Embracing agile marketing practices and leveraging AI are essential steps towards delivering personalised, customer-centric experiences that set organisations apart in the competitive landscape of financial services. Through pragmatic, incremental change, financial services marketers can shape the future of their industry and stay ahead in the age of the customer.

If you would like to delve deeper into the significance of digital micro transformation and examples of how it can be implemented successfully, please read our Unlocking success with digital micro transformation: embracing incremental change in Financial Services marketing article.

If you would like to discuss how Ratio can support you with your digital micro transformation efforts, get in touch with us at hello@ratiopartners.co.uk.