In our today’s modern society, the financial services industry has experienced significant changes.
Customer expectations have been changing over the years, and the financial services industry is not immune to these new demands by the consumers.
Bowing to all this pressure, the financial service industry has gone through tremendous transformation over time.
This has been fueled by changes in technology, customer intelligence and imposing of new guidelines and regulations by the industry regulators.
The financial service institutions are finding new ways of tackling traditional financial tasks in order to attract, and retain customers in this highly competitive market.
Most of the financial institutions have become innovative in service delivery, new products design and reengineering.
In recent times, the financial service industry has witnessed a lot of disruption and positive innovation that brought about new opportunities and challenges for financial institutions.
The following are the 3 key factors that we can expect to shape How the Financial Service Industry will work for the Consumers in today’s Modern Society
In today’s financial services industry, Technological change is the most creative and destructive force that affects how financial institutions operate and serve their customers.
For decades, the financial service industry has implemented the same business models. But today they find themselves challenged on all sides by innovators seeking to disrupt their businesses.
Technological innovations such us; Crowdfunding, peer-to-peer lending, mobile payments, bitcoin, robo-advisers have greatly changed business models of the financial service industry.
Nowadays, Financial services institutions compete to offer better products and services to their customers to avoid customer churn.
The following are the technological advances that affect how financial institutions work for the consumers;
- Sharing economy model,
- Cloud computing,
Government regulation can affect the financial services industry in positive or negative ways.
This has a direct impact on how the financial services provide products and services to the end consumers.
The regulations influence the administration and operations of financial institutions.
The most important part that the regulation plays in the industry is to call for increased vigilance and safeguards to protect the government, financial institutions and, most importantly, the consumers.
For example, the global financial crisis of 2008 changed the face of banking in the United States by bringing in a new dawn to the new regulations.
Some of the regulations that changed the way the financial service institutions delivered the service and products to the consumers are:
The Helping Families Save Their Homes Act 2009 – Key HFSHA provisions include the creation of a “safe harbor” against investor liability when servicers undertake loan modifications.
The Dodd-Frank Wall Street Reform and Consumer Protection Act – restricted banks’ investing and trading and established the Consumer Financial Protection Bureau.
Financial services institutions are using technology advancement to gather and analyse; customers ‘ details, activities and information to build deeper and more effective customer relationships and improve decision making.
In the past, the only ways customers could help companies better understand them was through traditional methods of market research.
The traditional market research process used to be that slow and costly.
Technology advancement has given financial services institutions access to exponentially more data about what users do and want.
By using tools like big data and analytics, financial services institutions can unlock the information inside the data to give customers what they really want.
It’s now every financial services institution’s job to understand the customers as the financial service industry strives to be customer-centric organisations.
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