Almost a fifth (19%) of European consumers would buy banking or insurance from tech giants such as Google, Amazon or Facebook if it were offered, according to our research from earlier this year.
As the threat from challenger brands increases, financial services firms need to think about how they’re going to retain their market share.
One answer? Data.
An incredible 97% of European consumers would be happy for banks or insurers to use their data in return for additional services.
But we know it’s not as simple as that.
Harnessing that data in the most effective way relies on having the right processes and culture within your workplace, something particularly challenging in traditional financial services organisations with huge numbers of employees spread across multiple locations and systems.
If you work in financial services, you might cast your eye enviously at other sectors’ ability to harness customer data. At the end of the day, the likes of Amazon, Facebook and Google have built their empires on clever use of data.
But in financial services, there’s a lot more rigour around data use. And with good reason. A data leak caused by human error, for example, could have catastrophic effects.
How do you create an environment and workplace culture that is built for harnessing data, yet adheres to the strong standards that customers and the FCA demand?
The right tools for the job
Simply equipping your staff with the latest laptops and smartphones doesn’t mean you’re enabling them for mobile working.
In an increasingly globalised market place, where offices are often sprawling campus environments and home-working is becoming more commonplace, providing access to the right data is more challenging than ever.
Intel’s 2016 Data Protection Benchmark Study reveals that financial services (along with Government) had the most data loss incidents, on average, per day. On top of that, the UK was the country with the most incidents. These breaches cost financial services firms and average of $221 per record.
Data Loss Protection is clearly a big issue and requires a dedicated strategy. This needs to be considered across the infrastructure, right down to the choice of operating system and device security. For example if a device knows the difference between working from the office and home, it can make appropriate data available to the user.
Which leads me to my next point…
Understanding the regulatory imperative
Using people’s personal data is never a straightforward process, but this is particularly true in financial services.
Collecting data for a specific purpose is one thing. We all know that if you then decide to start using it for completely different purposes you need to inform the people from whom you’ve collected it or risk breaching the Data Protection Act.
Working with a partner that has trod this path before can help prevent costly or time-consuming mistakes.
The best form of defence is attack
I’ve talked about some of the considerations for enabling collaborative use of technology, but what are the real benefits? How can it be used to tackle the threat of new competitors head on?
By properly collecting and using data, financial services firms can use that data to innovate and compete on the same level as these big consumer brands. All it requires is a little imagination.
Our research earlier this year also found almost a third (31%) of European consumers would consider buying services not traditionally associated with financial services such as broadband, energy or data storage from their bank or insurer.
I know I’d happily do so if they were able to offer me a personalised and competitive package. One or two less companies to deal with every month is only going to make my life easier!
But don’t forget, regulators will want to assess any data usage in the name of fair competition.
You could argue having records of what people really paid for services and when could give financial services firms an unfair advantage. Then again, most retail pricing is publicly available and freely traded on price comparison sites so perhaps this won’t be such a high-risk area.
In any case, having the exact dates for contract renewals on services such as broadband and utilities would certainly give banks and edge if they were considering entering these markets.
Joining it all up
Traditional financial services firms often have thousands of employees spread across multiple offices all over the world.
With data coming in at all times via multiple touch points, ensuring it is harnessed and ends up in the right places can be challenging.
But by creating a digital culture in which employees share and use data in the right way and supporting that with the relevant technology, banks and insurers can begin to start future-proofing themselves against the threat of new players.
Here’s to positive change in future!
For more on workplace technology in financial services, check out:
- Customer experience will make or break banks and insurers in the future – workplace technology could be the key to staying on the right side of history
Latest posts by Mike Foster (see all)
- Financial services at Fujitsu Forum 2017: everything you need to know - December 22, 2017
- Five lessons in financial services tech from 2017 - December 22, 2017
- Building a bright future at the Royal Bank of Scotland’s graduate event - December 21, 2017