The insurance industry is changing rapidly. Accelerated technical innovation cycles, the mobile revolution through tablets and smartphones, but also the aggressive appearance of new competitors from the net have fundamentally changed the rules of the game in the competition for customer favour. The best example of the upheavals is the rise of Check24. Within a very short time, the comparison portal succeeded in breaking through market structures that had grown over decades. There is much to suggest that Check24 is only the beginning. Because the digital revolution has only just begun. Insurers will have to rethink their sales organisation in the future, implement a comprehensive omni-channel strategy and overcome the boundaries between analogue and digital sales channels. This is not just about a defence strategy to secure their existence. At the moment, the sales of most players are still determined by historically grown sales structures – for example, exclusivity organisations, broker organisations, sales companies or cooperations with banks. For years, however, the growth momentum has been coming not from stationary but from direct sales. Insurers like Gothaer are drawing their conclusions from this development. They no longer see analogue and digital channels as separate worlds, but are trying to integrate online sales into traditional sales structures.
Learn more in our article Viele Kanäle, eine Strategie (engl.: Many channels, one strategy | The article is in German.) from the magazine “Versicherungswirtschaft”.
In times of regulation, low interest rates, digitalization, and new competition from fintechs, the corporate customer business is undergoing major changes that are having a negative impact on profitability despite rising demand for credit. To strengthen this sustainably, investments in the digital transformation, a customer-centric focus of the service portfolio, and excellent and innovative service offerings in particular are of utmost importance.
In 2019, retail customers in Germany used their smartphone or tablet for banking transactions more frequently than online banking for the first time. Banking apps can be used to agilely develop new features that enhance the customer experience at any time. Consileon helped a major German financial institution establish its existing app as the bank’s leading access channel – in line with their mobile-first approach.
Consileon supports companies holistically in the development and optimization of mobile banking apps – from strategy and conception to agile implementation.
The digital activation of customers is essential for increasing the usage rate of digital offerings. This increases digital penetration among customers and sustainably improves their customer experience. In addition, banks obtain new data on their customers, which they can use for a targeted customer approach. Consileon supported a large private bank in increasing the digital activation of its customers with a proven best-practice approach.
Consileon was able to sustainably increase digital penetration with a clear impact principle, generating valuable customer data and translating it into sales impulses. Consileon provided support in both concept development and implementation.
Merging online and offline channels to create a hybrid advisory experience is one of the biggest challenges facing any retail bank. Customers are using more and more channels to interact with their bank. A customer journey in retail banking now comprises nine touchpoints.
Consileon supported a large financial institution in the design, development and implementation of an innovative, holistic advisory process. This advisory process is at the heart of this bank’s omni-channel strategy.
Consileon accompanied the project end-to-end from conception to rollout. After the project was completed, customer satisfaction and thus the perceived expertise of the consultants rose from a good 79% to an excellent 89%. This can be attributed, among other things, to key aspects of HypoVereinsbank’s financial concept consulting:
The digital transformation and the associated adaptation requirements for banks are moving ever faster. The key competence of the digital age is therefore effective and agile change management. Banks must demonstrate the highest level of adaptability in order to prevail in the intense competitive environment of FinTechs and technology giants. However, radical transformations, which are urgently needed, can also trigger uncertainty among employees, as everything that already exists is called into question. This is why structured change management is necessary to turn those affected into participants. After all, the success of the change stands and falls with the actors involved.
In addition to change management, it is crucial for success to align management with the new, digital reality. One consequence of this approach is that new performance indicators must be used, such as the degree of digitally enabled customers, the development of hybrid customers, or the proportion of digital communication.
The proportion of purely digital customers is rising consistently, and with it the desire for a completely digitized customer journey – from the first contact to the conclusion of the deal.
A prerequisite for the complete digitization of customer journeys is to consistently take the customer’s perspective. Banks are sometimes too focused on their processes and ignore the needs of their customers. The customer journey must be viewed holistically – from customer initiation to closing and customer service. Banks should position themselves with the right information at every point of the customer journey and lead their customers through various digital channels to the conclusion of the purchase. In addition to front-end activities, banks also need to look at back-end processes. In order to make processes more efficient and scale them, they must be simple, lean, and free of media discontinuities.
Banks that consistently digitize their customer journeys also increase customer loyalty. While the average customer in retail banking only has a personal conversation with their bank advisor every three to five years, they use the mobile banking app every other day. Thus, financial institutions can increase the intensity of their customer relationships by expanding their digital offerings. In addition, the avoidance of contract papers and printouts pays off in the megatrend of sustainability.
In the field of tension between banks, FinTechs and technology giants, there will not be many winners in the area of platforms. But whoever controls them also occupies the customer interface and thus the data. Platforms such as Uber, Airbnb or Amazon have reset the rules of the game in existing industries with low levels of innovation. In order not to fall victim to FinTechs and technology giants, the established financial institutions must act. The future lies in a financial home as a central point of contact for the end consumer. There, they can conduct all their financial transactions, receive tailored offers, and also gain access to a comprehensive “beyond banking” offering.
The traditional banks still have the opportunity to assert themselves against the tech newcomers and firmly position themselves in the market. But to do so, the banks must shed their “silo mentality” and open up to third-party providers with their own interfaces – because the customer expects a solution from a single source. This development offers courageous and creative banks an opportunity to occupy the customer interface for themselves and to set themselves apart on the market by strategically integrating partners and using network effects.
The customer journey is becoming increasingly complex, with numerous touchpoints from customer initiation to purchase conclusion. New channels, such as chat and video consulting solutions, are constantly establishing themselves. The key to success is to merge the digital and physical channels that previously existed side by side – with complete data integrity.
Omni-channel excellence is achieved by identifying, designing, and networking sales channels and customer touchpoints along the customer journey to ensure consistent user experience. The focus here is on the customer, whose perspective all banks should consistently adopt. While the online completion rate of intuitive banking products is continuously increasing, many customers do not want to do without personal contact at the branch when making complex and emotional financial decisions. Expanding online configuration and closing capabilities helps to successively carry personal customer relationships into the digital world. This can be achieved by convincing customers of the added value of digital solutions. Digital activation can make a significant contribution to increasing customer acceptance.
With the online branch, as a hybrid sales format, a bridge can be built between the physical and digital worlds. At the same time, jumping-off points are important to enable interaction with an advisor – at any time of the customer journey.
The retail business is increasingly confronted with a “commoditization” of services. Comparison portals give customers the opportunity to compare standardized banking products in just a few seconds. At the same time, the emotional connection of customers with their bank is decreasing more and more. Instead, the customer experience and the digital customer journey are becoming a decisive purchasing feature.
In order to increase the attractiveness of their service offering, financial institutions need to individualize their offerings more strongly. The digital footprint of their customers helps banks to develop tailored offerings. When realigning their service offering, banks should take their cue from successful models in other industries. Differentiating between a non-priced basic offering and any premium services is one possibility. Premium services can be added on a modular basis and for a limited period of time. For example, an increase in the sum insured of an accident insurance policy can be booked directly on the ski lift. This on-demand availability of products and pay-per-use concepts enhances the customer experience – provided that the transaction can be completed with just a few clicks. Thanks to API interfaces, banks can further expand their offering according to customer needs and, in the next step, integrate third-party providers.