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Technology & People are transforming faster than ever before. This pandemic has forced consumers to change their attitudes, lifestyle, purchasing habits and created a desperate need for new products /solutions to help bridge the gap caused due to the massive shift in behavioural changes.
Companies are realising that their defined vision statement, the “why, how and what” and their product goals have completely changed. According to a research report by Accenture “42% of their respondents rated Financial Security as their top 3 priorities and over 60% said that Safety and Personal health were their #1 priority”, suggesting that consumers are now focusing back on the basics: health, safety, hygiene and financial security.
Over “40% of the respondents in a survey conducted in India, said they were new to networking and communication tools like video communication, chat and remote learning”, as reported by McKinsey, indicating that there is a new wave of consumers who were otherwise wary of digital solutions for communication but are now more comfortable using these technologies.
For the companies that are ready to make the technology change, there is a plethora of opportunities waiting to be conquered. What can the financial services & wealth management industry do to adapt to this massive shift in consumer behaviour?
1. Personalise customer experience with AI – Most companies have a ton of data on their customers but are missing the analysis that provide insights to help predict consumer behaviour. It’s critical for them to focus on consolidating & standardising their customer data to capture that 360 degree view, enabling them to have a deep understanding of their customers needs, associations, life events etc. Using ML, companies can focus on building their knowledge of the consumer, improve interactions and predict portfolio changes that can drive automated re-balancing. Bots can predict customer behaviour & help sell products at the right time that would empathise with the customer as it would be tailored to their personal and financial situation. “Consumers will be willing to pay 16% more for similar products or services with superior experience on top of building loyalty” (PWC, Research). Therefore, a rich engaging user experience that is powered by personalisation through AI and data consolidation using frameworks like Hadoop with languages like Python, will be the need of the hour.
2. Cash is quickly becoming obsolete – With concerns about physical cash potentially spreading the virus, the use of cash has declined faster than expected. According to a research conducted by EY last month, there was a 57% fall in cash usage among the respondents and 14% rise in digital payment tools with 34% preferring payments through contactless means. Digital wealth management companies can capture the market opportunity by offering solutions like UPI, NEFT/RTGS, Net banking & Wallets for investments. Digital on-boarding, e-reports, e-mandates, digital KYC verification etc. can also encourage a new set of consumers who previously used offline methodologies for managing their investments.
3. Customer Support has evolved to an Intelligent Assistant – There has been a massive social impact on the consumer as people are embracing technology for emotional support and communication. Chatbots can provide 24×7 support and with NLU they can be trained to have meaningful conversations. Emotions play a big part in buying and selling due to sentimental value, a phenomena called “ego-involvement” as termed by Carol Dweck and Ellen Leggett. Having a bot that is accessible to consumers all the time could help prevent irrational decisions that have historically led to boom, busts and bankruptcies. Additionally, as companies begin cutting down on their call centre resources, it is more efficient to get bots to resolve client issues and provide automated intelligent assistance at the right time. In a country like India, where we have over 720 dialects, using voice assistants to help the consumer becomes challenging as well as a dire need. But bots can only be as smart as the data provided. Therefore, companies that start early will benefit from training data. The more conversations are recorded, the richer the data set and the smarter we will get with decrypting intent and entities for natural language processing (NLP). Soon, IVAs combined with IOE (Internet of Everything) will become that trustworthy family/friend that not only resolves issues but also drives your investment decisions.
4. Low cost alternatives are the need of the hour – Lastly, as companies cut back on salaries and bonuses, everyone is looking to save. Low cost investment options like Direct Plans of Mutual Funds vs Regular plans, coupled with AI advisory that is cheaper than the fees paid to distributors through regular plans of mutual funds, will gain popularity.
