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By Terry Donohoe, CEO Europe, Ignition

At a recent Digital Wealth & CX Tech Forum, an interesting question was raised – should a firm focus on user experience or efficiency gains?

Changing customer expectations, a tsunami of digital advances, and the rise of younger generations, whose needs and experiences have been shaped by modern technologies, have fueled transformation across the financial services sector in recent years, creating a wealth of new opportunities. However, as firms navigate this new landscape, they must not prioritise one over the other. We’ve seen examples of firms adopting advice algorithms with the sole focus of increasing efficiencies in the advice process, which have led to a fall in the quality of customer experience. Meanwhile, others have channeled their efforts into improving customer service, ignoring the importance of back-end processes.

These options, however, represent a false dichotomy. In practice, efficiency gains and improved user experience are two sides of the same coin, offering firms the chance to enhance their service, lower costs and increase market share.

Appetite for change

With millennials born in the 1980s set to receive an inheritance almost twice as large as that received by those born in the 1960s (when compared to lifetime income)1, the way future generations approach financial advice is likely to be very different to their predecessors.

According to Simon Bussy, Consulting Director at Behaviour Consulting, it’s not just millennials who are looking for a different way to access financial advice that offers value for money – “Demand is changing across a range of age groups, including among individuals in or approaching retirement. In consequence, digital solutions have been gaining traction, with customers attracted by the greater convenience, easier accessibility and lower costs. The social and economic impact of the Covid-19 pandemic has also accelerated this shift.”

How to blend efficiency gains with a top user experience

In a competitive market where customers can switch with ease, the impact of user experience has never been so important. Indeed, research by EY suggests that a third of wealth management clients have switched managers in the past three years.2 Many of these will have made the switch because firms haven’t struck the right balance between user experience and efficiency.

Bussy concurs: “All too often businesses design beautiful websites and communications but then fail to achieve the results they forecast and don’t understand why. Leading firms recognise they need real insight into human behaviour to understand the triggers at each stage of the customer journey that will help them make the right decisions.”

Throughout the pandemic we have seen a rise in the use of digital fact finds and it is imperative that firms continue to leverage technology, such as open finance, in collating and utilising customer data if they are to build on these efficiency gains. By putting the right digital mechanics in place to seamlessly feed client data into back-office systems, combined with the right interventions and trigger points in the design, customers will be able to access advice when, how and from where they like.. Using analytics tools, firms can also generate documents and tailor guidance, products and services to individual needs, while making sure they continue to meet regulatory and compliance requirements.

Firms must also balance this focus with that of user experience, which extends far beyond customer interface. User experience encompasses the entire advice journey, from the way content and advice is shared with customers, to the design and usability of a website or app, to customer support and back office efficiencies. Each of these can be enhanced by behavioural design principles which understand the importance of shape, colour and content, and of word patterns used by advisers or support teams.

Notwithstanding this, even with the most technically advanced proposition, figures cannot tell an adviser everything they need to know and digital advice solutions cannot offer the same reassurance or support as human interaction. That is why digital is best used as part of a “hybrid” offering, driving efficiencies and enhancing and supporting financial advice rather than replacing it.

Firms need to ensure that while embracing digitalisation and driving efficiencies, they continue to invest in their support teams as part of the overall user experience, because if human support is lacking – either in numbers or in abilities – the overall customer experience will still be a negative one despite a great digital offering.  

Build efficiencies as you go

Although financial services has historically lagged behind other industries in terms of digitalisation, it is vital that firms do not let a lack of experience or the immaturity of their digital propositions hold them back. Firms should embrace digital advice and build efficiencies as they go, rather than risk losing clients by waiting to create the ‘perfect’ infrastructure. Customers have shown us that they are keen to embrace more affordable and flexible advice offerings, so it’s time that firms step up to deliver them. Through a combination of digital assistance and human touch, firms can seamlessly support to customers to make the best financial decisions in this ever-changing world.

  1. ‘Inheritances and inequality over the life cycle: what will they mean for younger generations?’ – Institute for Fiscal Studies, April 26, 2001
  2. 2019 Global Wealth Management Research, EY