Over the past few months we’ve spent time talking with leaders in Financial Services (FS) firms and listened hard as they shared with us the opportunities and obstacles they see for 2023. We talked with leaders in CX, Group Transformation, Group Innovation, Customer Operations, UX, Planning & Performance and CEOs, MDs and Heads of business lines in a range of retail banking and insurance firms. We listened and learnt about their priorities, opportunities and challenges, and where they see the space for technologies -- including those we specialise in here at ContactEngine to help them get stuff done, better, faster and with predictable, use-based costs.
The Gaps Between Acquisition and Onboarding: New Options
Acquiring customers is already a costly business in Financial Services in ‘normal’ times: Home Insurers spent £1.23bn acquiring customers in 2018, and Motor Insurers spent £134m on Price Comparison Websites (PCWs) in 2019 alone. In 2023, market demand is waning across pretty much every product except Consumer Credit, and forecasts from a range of market participants and others do not make for happy reading. Forecasts for business lending posit a net fall of 3.5% in 2023 as UK SMEs struggle to combat deteriorating economic outlook and rising interest rates. Nearly 30,000 of these firms are expected to lose that struggle and go insolvent, and not just in the hospitality sector, but also in construction, training companies, transport and storage businesses. For mortgage lending, the picture remains one of flat or very small growth: the UK mortgage market is projected to grow by just 0.7%, the lowest level since 2011.
As market demand wanes, and Financial Services firms at the same time contend themselves with higher interest rates, a riskier economic outlook and volatility in markets, something almost counter-intuitive happens: the firm becomes increasingly selective about with whom, and how, they choose to do business. As the opportunities for growth shrink through declining market demand, banks, for example, are expected to tighten their lending criteria across all product lines, including business lending and mortgages.
So even if budget for acquisitions is not so much of an obstacle, identifying the customers you want and getting them to feel the same about you will be extremely tough, and keeping the customers you already have is not going to be straightforward [read our Renewals in 2023 blog here], whoever you are.
In 2023, maintaining, let alone growing, the customer-base means that closing the gap between acquisition and actual onboarding is more important as an organisational core competency than ever before. That ‘leaky bucket’ needs fixing. None of this is a surprise to the leaders we spoke with. In common with many progressive FS firms of all shapes and sizes, the majority of them can check off most of the usual to-do lists including streamlining processes with automation and building (or building on) omnichannel capabilities to communicate with customers. This includes deploying (for a few) or actively evaluating (for most) SMS and WhatsApp as channels.
Priorities for 2023
Looking into 2023, from the vantage point of when we spoke in late-2022, they shared a range of real-life challenges, issues and priorities.
A persistent and persistently top priority remains to establish, understand and deploy Customer Journeys. The organisational goal is to map the customer’s ‘moments of truth’, from both a functional and ‘emotional’ perspective, and then – very importantly – to translate all that data into consistent, reliable (and compliant) technical processes in a clear, explainable and auditable way. Some of our leaders identified the emergence of a new emphasis away from customer segmentation per se towards an approach to customer journey analysis and management based on each customer’s personal and unique journey with the business. And then to systematically pinpoint how those customer ‘moments of truth’– from initial engagement, to onboarding, to offboarding – intersect with the organisation’s own ‘moments of truth’. And then be able to respond: at scale and velocity yet with context, and increasingly, with empathy.
A live example we heard from a variety of leaders focused specifically on acquisition in mortgage lending. Solving the ‘visibility issue’ of why significant volumes of mortgage offers languish with the customer (neither accepted nor turned down) has turned from operational irritation to a pressing strategic issue that must be fixed. It’s no good, they told us, to able to report in exhaustive detail (even produce predictive modelling) about this ‘leaky bucket’ without being able to grasp the issue – that is, engage with this significant group who are nearly, but not quite, actual customers - but who might yet be, with the application of proactive, contextualised, on-brand, automated conversational experiences designed to stimulate engagement with the expert humans in the firm, not simply as a data gathering exercise or even to get people online.
When it comes to acquisition, a focus on enabling the customer to get and stay in the channel of their choice, from acquisition and beyond, characterises the strategic thinking of the range of FS leaders with whom we spoke. For these leaders, recasting Technology’s primary role as the enabler of the expert human in the firm to ensure best outcomes for customers – not as the go-to option – is obvious. Although not the focus of this article, the impacts of Consumer Duty, e.g. in detecting and responding to indicators of Vulnerability in the customer’s journey with the firm, will also be a material driver [read our blog on Consumer Duty here].
Organisational responses to the acquisitions ‘leaky bucket’ problem is a first order priority for 2023. This must and will include proactive engagement. This means bridging a variety of organisational ‘gaps’ including capabilities for proactive, contextualised, on-brand, automated conversational experiences explicitly designed to encourage and enable the customer to be in touch directly with the expert humans in the firm.
The companies that get proactive customer care right view it as more than sending a one-way notification (SMS, app notification, email, letter, etc.) asking the customer to do something. Instead, they see it as an opportunity to engage the customer in a conversation that guides and supports them to the right outcome (for both the customer and the business – in this case a successful, efficient onboarding of the customer). Achieving this requires specialist proactive customer care technology, which is why they choose ContactEngine.
ContactEngine enables companies to engage entire customer bases in digital text- and voice-based proactive conversations. However, unlike notifications, these conversations actively seek an in-channel response, then keep that customer engaged in a personalised conversation until the objective of that conversation is fulfilled. With its configurable conversational journey design and ability to transact in-channel, ContactEngine keeps over 90% of proactive conversations fully automated without the need for a human agent to get involved. Every conversation is secure and fully auditable, making it simple for companies to evidence proactive customer care and reap its benefits.
If you would like to fix the ‘leaky bucket’ problem that you face and convert your proactive approach from simple notifications to proactive conversations, then get in touch…