What will the next innovation in Financial Services look like?
April 28, 2011 § Leave a comment
April 28, 2011 Over the last couple of days I have been thinking a lot about digital innovation for financial services. Part of my thinking is focusing on the forces that impact companies today – developing high quality customer experiences, changing customer expectations, pressures from social media, device proliferation, and a dizzying array of technology options to choose from.
However, I recently read an article from Forrester Research that noted a key area companies struggle with is a fundamental one – how to sell. For instance, an investment firm prides itself on advice and service, yet the site focuses on cost of trades and account fees. In this case, the company is not selling to its strengths, but offering “specs,” which pushes them to present their products and services like a commodity. Is the channel the problem or how organizations are using the channel?
Companies like USAA are changing the game in this respect and proving the “commodity challenge” as an issue to overcome versus an inherent restraint. In one simple, yet risky move, USAA added reviews and ratings to its products. A concept that is hard for many financial services execs to get their arms around. I think in the case of USAA, the move was strongly mitigated by the fact they knew their customers loved them and were likely to say good things. For those not saying good things, they knew they could fix the problems (and learn from them).
The impact: in year one of implementing rating and reviews, USAA sold 16,000 incremental products.
If this is one example of innovation, what are some others ways that financial services (or companies in any industry) can innovate or change the game?