Emerging Financial Services Trends

Emerging Financial Services Trends

February 11, 2019
Nandini Singh

Our knowledge of financial services and customer engagement is transforming. With the growing need for personalized wealth management and online services, consumers are demanding more from the industry. By catering to these evolving needs, your business has the ability to drive greater consumer satisfaction, loyalty, and overall profitability. Adopting the following four emerging financial services trends will equip you with the necessary tools to remain effective in the industry:

Holistic Wealth Management

Holistic wealth management, as a comprehensive form of financial planning which would cover all of one’s assets, liabilities, and financial goals, will emerge as a new kind of digitized business model. According to the 2018 Wealth Management Outlook conducted by Ernst & Young, holistic wealth managers are expected to gain a market share of 30% by 2025.

With the rise of digital wealth innovation, high net worth individuals expect to receive support that’s more advisory than product-driven. Not only do clients desire financial asset allocation, but they want their assets, liabilities, and life plans viewed and managed. This is to help deliver a better approach to after-tax wealth preservation and performance.

Additionally, with the presence of low-interest-rate environments and high volatility since the 2008 financial crisis, clients’ shares, bonds, and money market investments are giving way to alternative investments.


Influence of Big Data on Financial Services

The presence of big data in financial services can bring disruptive change to the industry. Although the financial sector may not require production or logistic processes like the industrial or manufacturing sectors, the daily operations of banks are fueled by a high volume of real-time transactions.

The potential of big data in this sector can bring about change in two areas: precision marketing and risk management. In precision marketing, big data would alter the information structure, allowing financial institutions to collect and analyze customer and prospect data. This would enable institutions to generate individualized and tailored services for their clients. Your institution can accomplish this by generating new revenue streams through data-driven offers. Risk management, where big data’s used to rework traditional risk management models, promotes accurate risk estimation at a low cost. By becoming more efficient and providing strengthened security for clients, financial services can continue to serve clients, instead of becoming obsolete in the face of emerging FinTech companies.

Introducing and leveraging big data in these areas will help institutions increase their operational efficiency and business performance. 

Use of RoboAdvisors for a Higher Volume of Clients

Robo-advisors were initially used to serve beginner investors and individuals with a lack of investment experience. Now, financial institutions are developing ways to have robo-advisors manage all aspects of a client’s financial life.

Instead of providing simple portfolio allocation, institutions are beginning to use robo-advisors to expand their focus to provide advice on insurance, employer plans, and debt and asset management. The use of robo-advisors costs less and has a lower account minimum than traditional financial advisors. So, clients may be more inclined to use these online services.  Leveraging these platforms to make them more holistic will allow the financial services industry to develop a strong online presence more seamlessly. 


Omnichannel Marketing

With the diminishment of physical interaction with clients, financial institutions are beginning to look toward different channels to engage clients.

Over the past five years, the financial services industry has adopted the use of online-only banking systems. By adopting an omnichannel financial services marketing strategy, clients can now apply for credit cards and check their balance through apps, SMS, and through other digital means. By having a financial institution’s brand exist in multiple places, they are increasing the degree of impact they have on larger groups of people. They are able to meet the evolving needs of existing and potential clients, by allowing them to access personal, financial information more efficiently if they so choose. Leveraging these channels allow financial institutions to create personalized experiences that have a greater likelihood of creating loyalty among clients. 

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