5 Key Trends Finance and Insurance Businesses Must Consider to Ensure Success in the 2020s

#1: Gen Z is coming of age, with high usage – and expectations –

of their banks and insurers.

Action:Two seemingly competing desires – for human contact and seamless digital

experiences – are prime motivators for your youngest customers. Gen-Z, now the second-largest generation in the U.S., is moving into the workforce.

Those financial services firms best able to provide these tech-savvy consumers with personalized and emotionally satisfying experiences online

and in person will win their loyalty.

77% of Gen Z members (people aged 14 to 21) already earn income through part-time or regular freelance employment.

21% of those in Gen-Z had already established a savings account before the age of 10.1

77%

21%

The pressure is on.Established insurance companies and traditional banks are now challenged to keep pace with digital-native FinTech upstarts and big technology companies seeking to

make inroads into the financial services industry.

To keep up, the industry as a whole must evolve. Advanced tools and technologies that enable banks and insurers to provide superior emotional experiences to

their digital customers by tracking behaviors and indications of engagement and frustration can change the game. Greater personalization and attention to detail

when it comes to experiences is the bedrock upon which customer loyalty is built.

So, to achieve success in the 2020s, it won’t be enough to simply track traditional metrics like page views, conversion rates, and bounce rates. You must know how to

track the quality of your customers’ experiences if you are to stay competitive.

The future of Finance and Insurance optimization rests on the new category of experience data.

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55% of those in Gen-Z visit a retail bank’s physical location at least several times every month.3

They’re using mobile devices and web applications more often than any other generation, and they’re more likely to conduct financial business with technology companies than any other generation.

But they’re also more likely to visit a local branch or brick-and-mortar office than any other generation

44% of those in Gen-Z will use products or services from a FinTech or tech organization to supplement their use of a traditional bank or credit union.2

44%

55%

#2: Today’s banking customers are increasingly fickle, but positive customer

experiences make them far less likely to stray.

FinTech

56% of customers will remain with a bank that

provides them with “easy and convenient service.”

54% of customers will stay if they feel they can

trust the brand.5

56% 54%

Action:With the rise of digital-native FinTech companies and big tech’s

entrance into the financial services market, banking and insurance customers have more options than ever before, and they’re eager to take advantage of new low-fee offerings. In this increasingly competitive climate, positive customer experiences remain

a major differentiator of winning brands.

74%74% of customers don’t announce in advance that they’re planning to switch because they “don’t believe it will make a difference.”4

#3: In this, the digital age, human interactions – and emotional relationships with brands – have

never been more important.

“Poor service” is the #1 reason customers give for leaving their banks.

Sources include:

1: “The State of Gen Z: Meet the Throwback Generation,” The Center for Generational Kinetics, 2017 cdn2.hubspot.net/hubfs/5146762/GenZWPStudy.pdf

2: ”Generation Z: The Kids Are All Right,” Raddon Research, 2018 raddon.com/sites/default/files/genz-executive-summary.pdf

3: “Gen Z is a Throwback When It Comes to In-Person Banking,” Jeff Edelstein, Civic Science, October 2019 civicscience.com/gen-z-is-a-throwback-when-it-comes-to-in-person-banking

4: “The Banking Customer Experience Report,” Qualtrics, 2019 civicscience.com/gen-z-is-a-throwback-when-it-comes-to-in-person-banking

5: “Positive CX earns bank customer loyalty,” Sankar Krishnan, CapGemini, June 2019 www.capgemini.com/2019/06/positive-cx-earns-bank-customer-loyalty

6: “Experience is everything: Here’s how to get it right,” PWC, 2018 www.pwc.de/de/consulting/pwc-consumer-intelligence-series-customer-experience.pdf

7: “Convert ‘Silent Attrition’ into Banking Engagement and Profits,” Javelin Strategy and Research, February 2015 insight2action.deluxe.com/rs/deluxe1/images/SA_WP_20150218_JAVSILENTATTRITION.pdf

8: “2019 State of Digital Sales in Banking,” Temenos, 2019 temenos.com/wp-content/uploads/2019/07/digital_sales_in_banking_2019-Apr-04.pdf

9: “The Insurance Industry Needs an Omni-channel Approach for Superior Customer Service,” InfoSys, 2014 the-digital-insurer.com/wp-content/uploads/2015/03/472-omni-channel-customer-experience.pdf

10: “The Balancing Act: Omnichannel Excellence in Retail Banking,” Walter Rizzi, Zubin Taraporevala, McKinsey & Company, January 2019 mckinsey.com/industries/financial-services/our-insights/the-balancing-act-omnichannel-excellence-in-retail-banking

11: “UK Now Ready for Biometric Banking,” Experian, January 2016 experianplc.com/media/news/2016/uk-now-ready-for-biometric-banking

12: “2019 Consumer Digital Banking Survey: The ever-changing consumer,” PWC, June 2019 pwc.com/us/en/industries/financial-services/library/digital-banking-consumer-survey.html

13: “CX in Banking: Can Banks Get Some Love?,” Bain & Company, December 2018 bain.com/insights/cx-bank-loyalty-2018-infographic

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82% of U.S. consumers want more in-person interaction with the employees of the companies with which they do business.

82%

75% of customers feel that “friendly service” and “knowledgeable service” are worth paying more for – and are the most important facet of customer service quality.6

75%

Action:Optimize your website and mobile apps to ensure that they provide

positive emotional experiences. Customers should feel that these digital experiences are an extension of the personal relationships they

develop with employees. New technologies can seamlessly integrate monitoring and analysis of customers’ emotional experiences online with immediate offers of live agent assistance when

behaviors show evidence of confusion or frustration.

Action:Centralize CX measurement with a tool that can correlate behaviors and

engagement across multiple digital properties. Be prepared to share insights from this technology with sales and customer service teams.

Action:A benefit of delivering more data-driven, personalized customer experiences is better protection against fraud. Whether it’s a mobile app that uses fingerprint verification instead of a password, or a website that notifies customers every time an anomalous payment is made from their account, advanced technologies can

massively improve consumers’ confidence in your financial institution.

and are 3x as likely to open additional accounts with the same institution within the next 12 months.7

#4: Today’s customers expect seamless cross-channel experiences – from mobile app to website, and ATM to office or branch location.

#5: Advances in technology that combine enhanced security with convenience are

winning the hearts and minds of consumers.

Customers who receive such positive service own 2.7x as many accounts as those who experience frustration or inconvenience,

2.7x 3x

76%

63%

Mobile app usage is still on the rise, with 76% of personal banking customers now able to apply for loans or new accounts via mobile devices.8

More than 63% of customers have contacted their insurer through multiple service channels including the company website, online chat, mobile app and social media within the past 24 months.9

Banks that excel at presenting unified experiences across digital channels and in-person encounters see increased sales and customer loyalty. Those that add advanced online behavior analytics into the mix can grow sales productivity by as much as 40%.10

40%

61% 53% 54%

61% of customers now believe that

biometric identification technologies are as

secure or more secure than passwords.11

Trust has a major impact on how consumers form relationships with banks: 53% of those in Gen-Z

trust their primary financial institution the most.12

54% of bank customers trust at least one tech

company more than banks in general.13