Our knowledge of financial services and customer engagement is expanding. With the growing need for personalized wealth management and online services, consumers are demanding more from the industry. By catering to these emerging financial services trends, your business can drive greater consumer satisfaction, loyalty, and overall profitability.
The following four financial services trends, if adopted, will equip you with the tools to remain effective in the industry:
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 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. In short: 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.
The presence of big data in financial services can also bring disruptive change to the industry. The daily operations of banks are fueled by a high volume of real-time transactions. So, the financial sector may not require production or logistic processes like the industrial or manufacturing sectors.
Also, the potential of big data 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.
Initially, robo-advisors were 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. So they’re now able 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.
With the diminishment of physical interaction with clients, financial institutions are also 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.
Download WealthEngine and Coldwell Banker’s A Look At Millennial Wealth 2019 to understand the motivations, spending habits, and trends of millennial millionaires.
By digitizing your clients’ experience when it comes to financial services, it becomes easier to engage them efficiently and effectively.
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