Not only have new services introduced agile, digital savvy businesses to a range of markets, they are starting to create a gap between customer expectations and the reality of what most organisations can deliver.
Whether it’s buying or leasing a house or a car, setting up a mobile phone contract, changing utility provider, opening a brokerage, credit card or a bank account, for example, the process to do this needs to be a quick, personalised and easy experience. If a business can’t provide this, a competitor will.
If a digital onboarding process fails to live up to the high expectation that most customers now have, friction is generated and drop out is significant.
Dealing with drop out is a problem because it increases the cost per acquisition. This could mean providers are working with a model where it could take years of customer growth to even reach the break-even point. This situation isn’t sustainable.
Global businesses are reportedly having significant challenges as they evolve into a digitally focussed model. Improving customer experience is the main priority for a business. This in turn will offer more loyalty and therefore more long-term business. Digital will likely be a driver in meeting customer expectations and can also be more efficient too. The efficiency that digital provides could reduce the cost to serve. It also presents a great opportunity to create industry-leading new systems to ensure a successful digital onboarding process for all customers.
The digital marketplace represented US$2 trillion (£1.57 trillion) in 2016 – and is expected to grow by over $1 trillion by 2020 – and as more businesses make a digital transformation the less agile and cost-constrained organisations are likely to find the next three years very challenging.
A convergence of application program interface (API) architectures with mobile technology, digital identity and big data, will create an environment where there’s significant and ongoing opportunity to create excellent onboarding experiences for customers.
Innovation is critical. In order to achieve this, businesses need to consider how they incorporate customer-centric solutions that are also efficient in their makeup. They need to be fast, flexible and agile. They also need to be able to respond to the changing market and intelligently deliver outputs that balance risk and expectation.
The rise of Fintech has meant that businesses can now access fast, innovative and flexible solutions. This offers a great partnering opportunity but may also present a competitive threat. Fintechs themselves have started to capitalise on their size and flexibility in order to develop products and service’s they can offer direct to the consumer. Whilst larger organisations have the advantage of loyalty and trust, Fintechs have the ability to offer personalised and responsive solutions quickly, therefore meeting the customer need for agility and speed.
With the implementation of Open Banking set to see an even further rise in Fintech entry, the market is now a level playing field and no one business, large or small, has the time to get it wrong.
The market is evolving fast. As are customer expectations and technology. With different businesses, new and old, innovating all the time – being able to predict who will offer the next transformational model is unknown. When it lands on the lap of the customer, this will determine the success.
You can see from some of the revolutions developed in this decade alone that anything that transforms a market or a process is based on the customer. Their needs and expectations are considered and met. It just so happens that most innovations of the past few years have been digitally driven.
Sources: Industrial Distribution.