With the digital revolution transforming the business world around us, Financial Services (FS) Providers, Insurance Companies and Banks are faced with a new age challenge brought on by FinTech companies. These modern start-ups are driving the constant penetration of technology-driven applications with a ‘customer first’ approach as opposed to the more traditional ‘product first’ approach. But do traditional banks have what it takes to catch up to these fast paced FinTech start-ups? Read on to find out.
Research firm Frost & Sullivan says the Australian FinTech sector is poised to take $10 billion in aggregated revenues away from the big Australian banks, while contributing $3 billion of new revenue to the Australian financial services sector, by 2020. In addition, PwC states that more than 20% of Financial Service business is at risk to FinTechs by 2020. Factor in the findings of a 2016 Forrester report that reveals revenue growth is driven by great customer experiences and it becomes clear what advantage FinTech start-ups have over traditional Financial Services – they deliver frictionless customer experiences.
The FinTech revolution is well and truly set to change the way traditional financial services businesses operate. The new upcoming industry/sector encompasses companies, emerging by the minute, that use technology to make financial services more efficient, making for a better customer experience. While the traditional banks and financial services are more stable and FinTechs actually depend on them to grow, it wouldn’t be wrong to say that the banks could learn a thing or two about great customer experience from these FinTechs. In comparison to banking, FinTech offers a level of innovation and agility that most traditional financial institutions cannot handle. Technology such as Robo-advisors, Data analytics, Social trading platforms, Blockchain, IoT solutions etc. are putting FinTech start-ups a step ahead of traditional banking institutions. While few of the major market players are adapting to the change by partnering with FinTechs, adopting newer technologies or by building in-house teams to implement innovations, a majority of firms are likely to lose their market share owing to their inability or tardiness to adapt.
So how did banks let this happen? The aftermath of the 2008 financial crisis led to stricter financial regulations and changing consumer demands, making certain lines of business less profitable for banks and other financial institutions. This created an opening for tech-enabled startups to step in and fill the void. There’s also been a seismic shift in customer expectations from customers who are now accustomed to a frictionless digital experience offered by companies such as Google, DocuSign, AirBnb, Uber, Apple and the likes. Digital native customers have come to expect a more integrated digital banking and Financial Service experience.
According to PWC, consumer banking, fund transfer and payments are the sectors most likely to be disrupted over the next five years followed by asset management and insurance. Use of newer technology and digital applications and the increased use of electronic devices by customers is putting the traditional way of delivering Financial Services at risk.
Until recently banks continued to take a product-centric approach until FinTech firms challenged them by taking a customer-centric approach to delivering solutions. New FinTech players are able to develop better technological solutions and deliver an amazing customer experience using agile IT systems whereas traditional Financial Service organisations are still dependent on legacy systems that tie them down. But that doesn’t mean traditional Financial Services organisations can’t adapt.
In the Age of the Customer, poor sales onboarding and servicing hurts the customer experience and the bottom line. Digital natives don’t do paperwork and using PDF forms to onboard and manage them leads to poor customer satisfaction, incomplete and incorrect information and often, expensive, exception processes. There is a huge opportunity for traditional Financial Services organisations to automate these key customer touch points to acquire and retain their customers via Digital Transaction Management (DTM).
According to Aragon Research, DTM is a business application that uses cloud-based software and services to digitally manage a wide range of document-centric business processes, involving people, documents, data and transactions both inside and outside the firewall. DTM goes beyond content and document management to include e-signatures, authentication, and non-repudiation; document transfer and certification; secure archiving that goes beyond records management; and a variety of meta-processes around managing electronic transactions and the documents associated with them.
Aragon Research recently named Intelledox as a hot vendor in DTM. As a technology innovator, Intelledox offers solutions that help traditional Financial Services firms adapt and advance their business processes. Using the Infiniti Adaptive Engagement platform, Intelledox helps Financial Services companies extend their legacy IT investment to develop and deploy the next level of customer self-service solutions. Intelledox is helping traditional Financial Services emulate FinTech start-ups by helping them streamline the next generation of customer and employee engagement.
Some common Financial Service processes that Intelledox Infiniti automates include:
- New Account Opening
- Know your Customer (KYC)
- Anti-Money Laundering
- Customer Onboarding Welcome Kits
- Mortgage Loan Applications
- Personalised Customer Financial Plans
- Proposals and Quotes
- Statements of Advice (SOA)
- Customer self-service for Change of Address, Change of Beneficiary, Account updates
- Automate other manual or PDF forms-based processes
Intelledox Infiniti provides intuitive and guided Customer experiences to collect data and information and creates engaging communications. Financial Services firms using Intelledox Infiniti can drive ROI across the customer lifecycle, from ‘Acquisition’ through to ‘On-boarding’ and the ‘Servicing and Growth’ stage.