The digital transformation in financial services is more apparent than ever. During the COVID-19 crisis, several industries, including the financial sector, were deemed “essential” to the survival of communities. Marked as such, the financial services industry revolutionized the way it adopted technology to service and communicate with its customers. This evolution is a necessary (but formidable) task to ensure the success of the economy as people begin their return to normalcy.
The Value of the Digital Transformation in Financial Services
Even before 2020, financial institutions adopted new technology to modernize their communication with customers. But with consumers increasing their app usage by 20% during this time of disruption, customer experience management has moved from a luxury to a necessity in today’s world.
Naturally, digital transformation strengthens brand communities as apps and social media allow customers to interact with their financial professionals from anywhere in the world. With generational wealth transitioning into the hands of millennials and Gen Z, meeting them on their (digital) turf is more important than ever before.
From 2011 to 2017, Accenture research showed that digitally-focused banks saw the gap between revenue and cost more than double that of their outmoded counterparts. This revenue growth can be attributed in large part to providing a great digital experience, resulting in satisfied customers who become brand advocates and spread the word to their families, friends, and the thousands of strangers reading their online reviews and social media posts. Couple that with a recent Accenture study showing that 50% of consumers interact with their banks via a mobile app or website.
With Millennials set to inherit $68 trillion from their Baby Boomer parents in the coming years, being visible with a positive online reputation, staying top-of-mind on social media (such as utilizing Hootsuite reputation management), and developing a local SEO strategy are all critical steps to catching the younger generation’s eye (and assets).
Using Online Reputation Management to Acquire and Retain Customers
In the past, financial advisors could not use customer reviews and testimonials to attract consumers due to previous laws from the Securities and Exchange Commission. However, recent changes in the ruling now allow those groups to leverage reviews and testimonials in advertisements, provided that they meet specific crieria.
This new ruling opens up a major avenue when it comes to customer acquisition – especially for financial organizations following a strategy that involves choosing which SEC-compliant reviews and testimonials to use in their advertising campaigns (for example, with a review widget on their website like ReviewTrackers’ Amplify).
From the consumer standpoint, these reviews and testimonials serve as compelling content to convert because it is the social proof they need to see before making a purchase. The words of a consumer who had previous experience with an advisor or organization lend more credence to a product or service than the traditional marketing lingo used for advertising. From an operations perspective, using ratings and reviews can reduce cost because using consumer feedback is free. Instead, additional funds can be used in other ways that directly improve the customer experience.
While these changes allow for new methods of attracting consumers, we still recommend checking with your compliance team when engaging in these activities.
Customer reviews data shows financial services as a whole is 4.06 out of 5 stars, which means there is minimal risk and likely maximum reward in analyzing and publicizing customer feedback. When done manually, this process can eat away at valuable time, but utilizing specific platforms like ReviewTrackers and Hootsuite reputation management software can speed up and even automate this process.
Translating the customer experience into reviews can have many benefits, ranging from better SEO, qualified lead generation, and an improved client experience. Financial institutions can isolate customer experience analytics through client feedback to fuel intelligent business decision-making with reputation management solutions. This can be done for all feedback or limited to only when you monitor app reviews, but it is a powerful tool that should not be overlooked.
When compliance comes into question, utilizing reputation management technology and effective social media strategies enables financial organizations to address compliance standards from the top-down. In addition to granting corporate marketing teams peace of mind, this gives individual agents and advisors the autonomy to post pre-approved social media content and review responses to further engage potential and current clients.
The Long-Term Effects of Digital Transformation in Financial Services
The digital transformation in financial services has allowed institutions to protect themselves against environmental factors well beyond their control while strengthening their existing communities and bringing in new (and younger) businesses.
The general population has adopted technology as an integral part of their lives. If financial institutions choose to leverage online activity by responding to reviews, engaging with customers on social media, and proactively listening to consumer needs, they can grow their customer base through improved online experiences and rebuild trust in an industry that has seen a reputational deficit.