August 11, 2021
Digital transformation is not just about technology, data, cloud, and cyber resilience. The global pandemic has demonstrated that we need to focus on the people for a true change of financial processes, as much as for a genuine transformation within our organizations. With the emerge of COVID-19, the pace of digitalization in customer habits has gained more and more momentum. Modern banking must now turn to strategies to combine digitalization, a careful attention to money culture and more emphasis on the customer.
What exactly are the layers of human centricity in digital finance that the financial institutions should watch out for to remain competitive in the market, and to help their customers get the best experience? How exactly should banks, FinTechs, or solution providers approach their clients’ specific needs and save time and energy?
Recent McKinsey research on 23 publicly traded US banks found that there are huge rewards for those financial institutions who deliver exquisite customer experience in services – a profit up to 55%. Some of the effective approaches to increasing human focus in finance digitalization must include remote coaching and advice, convenient how-to explanations to handle digital work, and surely an empathetic touch; rather than a simplified one-size-fits-all strategy assuming that all human beings are keeping the same pace of being tech oriented.
During the research and agenda-building process of our upcoming Digital Finance 2021 Summit, our well-endorsed speaker Erin Taylor from European Women Payments Network told us about how culture shapes our money mentality. She underlined that even most educated people have contradictory attitudes to money and digitalizing their finances; and some of these behaviors come from the money culture that the person is born into. The cultural inclinations to saving, spending, using technology, and investing influence people’s use of financial products, and institutions producing today’s financial services must watch out for these cultural values that are intrinsically laid in people’s day to day behavior in order to produce services that resonates with people’s lives.
Financial Times mentions an in-line opinion by Holly Mackay, a UK personal finance expert, saying “I can’t think of any investment manager who would have spent any time before thinking about anthropology or psychology,” which summarizes this unorthodox approach to regulating finance that is gaining more and more popularity in the sector. Most of the time, we witness financial services designed in an extremely sophisticated or complex way that shocks the beginner-level users, which repels the new user experience and causes total ignorance of the emerging technology entering the market. In order to avoid that and improve inclusiveness in financial services, the providers of these services must think how real people deal with digitalization rather than the retail investors.
Support Your Clients’ Digitalization Journey
One way to achieve this is simply helping your clients go digital, and support them in their journey of acquiring new knowledge in financial digitalization. While European banks have much more profound success in centralizing customer needs in this regard, many US-based banks still struggle with inviting their customers to use even mobile apps. To increase customer satisfaction by avoiding unnecessary visits to the nearest branch, watch out for the learning curve of digitalization, and offer as smooth a transition to digital banking as possible. The best way of achieving this is keeping a keen eye on the cultural factors especially with developing countries and aging societies.
Understand Cultural Approaches to Money and Technology
Understanding the societal inclinations can help financial institutions produce the services and products that serve the needs of certain communities in a more efficient way. Think about your geographical filters: Where do the majority of your clients are located? What is the main source of income in these countries, and what kind of behavioral economy traits lay in the country’s identity?
Targetting these aspects will help you set more specific targets for your specific group of customers, and help them excel in their own digitalizing journey with your support. Interested in the topic and would like to find out more? Visit our Digital Finance 2021 Summit to find out more!
