Financial services are a range of economic services provided by the finance industry. They include businesses such as credit-card companies, banks, and credit unions. Each provides a particular type of service that benefits the customer. The challenges facing the financial services industry include the customer-centricity of the industry, the complexity of its operations, and the dependency on IT systems. However, the challenges that face the industry are not exclusive to these. Other challenges include competition for talent, IT system dependencies, and dependence on legacy systems.
Customer-centricity
With COVID-19 and disruptive competitors gaining ground, the financial sector is transforming itself to be more customer-centric. In a race to digitalise, many providers have overlooked the needs of customers. This is changing, and financial providers must rethink what they offer to maintain their customer-centricity. In this article, I will discuss the importance of customer-centricity in financial services and how it can help your company survive the changes ahead.
For financial institutions, implementing a customer-centric approach is essential to building trust with customers. Providing guidance and help that feels relevant and specific to a customer’s needs is critical to establishing customer loyalty and improving conversions and sales. Personalization can be easily achieved through the use of technology, and a customer-centric approach to financial services is an excellent way to ensure this. Here are three reasons why you need to adopt this approach in your organization.
Complexity
The complexity of financial services is a central problem. It arises when a firm tries to provide more features and functions to its clients at the expense of the complexity of its business model. Adding more features can stifle creativity and hinder the agility of an organization that once ran very efficiently. The report explores five sources of complexity for financial services, including geographical expansion, channel proliferation, product proliferation, and regulatory requirements.
Among other factors, this phenomenon correlates with regulatory tightening following the 2008/2009 global financial crisis. However, a study should take into account the increased regulatory costs associated with complexity. While regulatory costs are not the sole factor affecting bank profitability, they are significant and should be taken into account. These factors make financial services more complex and potentially risky. However, the growing complexity of these services is not a sign of impending doom.
Dependence on IT systems
The Financial Services Sector is one of the most reliant sectors in the country, but it faces serious threats. Recent large-scale power outages and the sophistication of cyberattacks are among the many threats. These vulnerabilities may result in systemic cyber events, which could threaten the nation’s financial stability. A key element for ensuring that financial systems remain resilient and secure is incorporating robust capital buffers. This article examines how to build these buffers to mitigate these risks.
Competition for talent
The competition for talent in financial services is fierce. With salaries rising and diversity targets being set higher, it is important to create an environment that promotes equal opportunity for all employees. To do this, organisations need to provide remote working opportunities, provide better training, and take action to unlock hidden talent. While recruiting new talent is an important goal, there are other ways to increase the overall supply of highly qualified candidates. This article looks at some of these strategies.
Finserv is facing a variety of challenges, from the emergence of FinTech startups to the growing popularity of technology and innovation. To compete, the sector must attract top talent and retain it. Next-generation workers are looking for opportunities for career development, a sense of purpose, and the opportunity to leverage technology to enhance their work experience. A fundamental rethinking of the talent landscape for the FS sector is necessary. Read on for more.