The shift to a customer-centric approach to service delivery has been in flight for some time. This was already happening before Consumer Duty and the associated focus on Vulnerable Customer Management.
However, the focus on putting customers at the heart of firms’ service offering over the last few years has accelerated this process.
The scale of change has been quite impressive and there are a few key areas that warrant attention.
Re-designing the operating model and structure
There has been a broad shift, though by no means a universal one, in ensuring the customer journey is optimised.
There are of course functions that need ringfencing, but there is a general acknowledgement that aligning teams, whether front, middle, or back office to a customer journey view will ensure ownership of customer requests and transactions.
This team approach also reduces handoffs and end-to-end times, which have benefits for both the customer and the business in reduced costs.
Multi/Omni-Channel Approaches
There are far more avenues open to customers in how they communicate and choose to receive communications. Creating more options for customers and allowing them to move from one to another seamlessly is now becoming a mainstream idea, even if there remain significant challenges in ensuring the solutions and culture are embedded.
Customer communications preferences are varied, with many still opting for the telephone. There is, however, a growing acceptance of digital channels such as Chatbots – especially as AI becomes more advanced.
Enhancing Services Through Customer Feedback
Customer feedback has become a core part of how firms develop their services. The introduction of Consumer Duty has encouraged firms look at data to understand whether they are delivering for their customers.
This data can help determine and understand the root cause of issues and action can be implemented to prevent future occurrences.
When this information is coupled with direct feedback, such as sentiment analysis, or in focus groups, firms have much more information to deliver service enhancements and support a customer-centric approach, rather than an inward-facing view of a firm’s needs.
So, does all this amount to a Customer-Controlled Experience? The concept takes the ideas of the customer-centric approach but provides the customer with far more control over the services they choose to access, how they access them, and when.
Work to do
Whilst significant progress has been made, it is apparent that there is still considerable work to do if the customer is going to be in control.
Examples of where the process is lacking include:
- Dissemination of information
Wealth Management firms are often missing opportunities to develop more meaningful customer interactions. Regulatory requirements, such as statements, are viewed as a set of requirements to deliver information in a uniform way. However, all communications are an opportunity to develop a two-way interaction between the customer and the firm.
Providing opportunities for the customer to interact with their data – comparing performance or investment risks for example – can put more control in the hands of customers.
The potential for AI, such as Large Language Models, which allow customers to query their data, is huge, but many firms would benefit from creating a more interactive process using readily available digital channels.
- Continuous Interaction
Customer journeys have been a step-change in delivering better customer interactions through the end-to-end ownership of a transaction. However, firms should also consider how they are facilitating the customer’s end goals rather than just the transaction. A person’s finances are intrinsically emotive, and behind the transaction is usually a deeper desire to ensure they will be financially secure during retirement and able to provide for their family.
So, perhaps the next evolution is to provide an operating model that allows for ‘continuous interaction’. This continuous interaction puts the customers ultimate goals at its heart, rather than a ‘start/stop’ transactional view. That doesn’t mean daily, weekly or even monthly interactions; The key is to develop the customer journey to be more holistic, allowing them to have more control over how the services are delivered.
- Customer Empowerment
Creating more access to communication channels, or flexibility between them, is clearly of benefit to customers when done right. However, delivering customer empowerment focusses on enabling them to control the services they require and how they access them. This is reliant on customer understanding.
As one of the four outcomes of the Consumer Duty, we have seen a significant shift in how this is viewed. However, whilst jargon may have decreased, and the customer now gets far clearer instructions based on layering communications, has this really delivered on empowering the customer?
Customer empowerment should go beyond simply providing information to offering a more interactive service and delivering resources that support the customer to make decisions, even if different customers put different emphasis on different information.
As data is now becoming more readily available, through behavioural and sentiment analytics, wealth managers can help shape interactions with their customers on their preferred channel(s).
Future
Customer experience is constantly evolving as customer demand increases.
For wealth management, the standards for customers are being set elsewhere in other industries. Improvements have been made and this will continue but unfortunately, it has taken regulatory change to force the hand of many.
Wealth management cannot be content to stand still, it must look at how it adapts further so that it isn’t always playing catch up.
By Dom House, Lead Consultant at Simplify Consulting
