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The shape of things to come

March 2016

Chris Riddell, Futurist

With the retail digital experience now shaping consumer expectations about how financial services are delivered, futurist Chris Riddell discusses the power of disruption and innovation and how the industry can adapt to a quickly changing world.

How do you define ‘disruption’ and ‘innovation’?

These are words that have been overused in the last few years. Everyone wants to be disruptive but no one wants to be disrupted. However every business faces disruption. The landscape of industries, including financial services, is changing dramatically on a daily basis at an unprecedented pace. We are hyperconnected now and the pace of change and globalisation means the nature of disruption itself is being disrupted.

Many businesses say they want to be disruptive, but very few have the special ingredients needed to be truly disruptive. One of the most important is having the right culture.

It’s not necessarily about coming up with the next big idea, but thinking about the ‘how’. How are you structuring your business today to be responsive in the new era? You need the right people in the right roles with the right capacity to do things. These may be roles that did not even exist five years ago.

For example, the Customer Experience Office (CXO) is now a key role that is directly accountable for the end-to-end customer experience – from using your app to visiting your store. This experience now needs to be frictionless and all businesses need to be ahead of the curve on this or customers will simply walk away.

Chief Digital Officer is another key role. Marketing used to be responsible for advertising and websites etc; now the digital experience is not just a marketing role, or a technology role but a hybrid of the two.

What key trends will define the future of business over the next 12-24 months? The next five years?

We’re in a world of super connectivity where everything we do is connected online. This is allowing businesses to connect with consumers 24/7, 365 days per year and drive deep customer insights.

We used to only connect when in store or through the phone. Now we see how customers sleep, when they walk into their house, go to work and their health and fitness regime. We can now gather all this data and customers trust us more than ever to use it in a non-invasive way to drive personalised experiences.

NAB’s launch of the MLC Smart Watch - a device which allows some insurance customers to track their health and lifestyle information - is a great example of how a large bank has understood what consumers want and is meeting that need.

How is the financial services sector responding to disruption – specifically in the arena of financial advice and investment?

Historically, financial services have been complacent at best, but the global financial crisis changed this. It has reframed the way the younger generation views banks particularly. Trust is now very different and financial service providers have had to transform how they approach people and their whole experience. Relationships are not as sticky and tangible as they used to be – when something goes wrong the ability to change to another provider is easy now, so everyone has to work in a different way to keep relationships functioning well.

Customers are also now expecting the same experience from their financial services provider as they get from iTunes or Amazon. Apple changed the way we transact and Millennials have an expectation that every interaction with any business should be like Apple.

You can no longer generically profile people; you need to make sure everyone has a personalised experience and we now have the technology platforms available to do so.



Many businesses say they want to be disruptive, but very few have the special Ingredients needed to be truly disruptive



How will the advent of automated advice impact the sector?

The automation of advice will not replace the financial adviser – it’s there to help create a relationship earlier in the customer’s financial journey and take away the monotonous, low value part – paperwork and processing. Ultimately it should benefit advisers because it will create a longer relationship.

Can smaller financial services businesses adapt without major investment?

All these ideas are scalable. Smaller businesses have a larger capacity to be responsive. They’re more agile and they have more opportunity to create a truly personal experience. They can make decisions more quickly than large organisations, which are often entrenched in old processes and systems.

There are low cost options – you don’t have to build a bespoke app. The first step is to look at what you already have and how you can adapt it. Email is still the most effective form of communication and you can now personalise en masse through easily available and sometimes even free platforms, such as MailChimp and Salesforce, to drive deep personalisation.