In the Financial Service industry many view price as the key differentiator, yet consumer personalisation is a much more tangible and sustainable source of differentiation. But why not have both?
Competitive pressures are a business reality, and the financial services’ majestic ‘old guard’ are facing some serious competition from consumer marketing-savvy retailers who have started to operate financial services arms. Complacency and relying on brand loyalty is not an option. Neither is competing on price as this only serves to drive down margins whilst attracting customers who disappear as soon as they see something cheaper ‘down the road’.
What is needed is a differentiator, a means by which you can finesse the competition through better targeting and personalisation. Whilst flexibility in customer and risk assessment is an essential cornerstone in the push for better pricing; it is the ability to personalise offers and optimise packages of products that managed creatively drives competitive differentiation. That ability to dynamically assess, price and customise directly impacts your revenue.
Traditionally a manual underwriting process is the seen as the only way to assess specialised risk. Whilst ticking the ‘personalisation’ box, any manual intervention adds time and cost to the process. Time which today’s customer is not going to give you, and at a cost that puts you out of reach.
By embracing the right technology product providers can offer both speed and personalisation, reduce risk, maximise profit and enhance their service offering. Telematics is a great example – motor insurers are already using the ‘black box’ to evaluate customer driving habits to personalise their insurance premiums. Whereas at the other end Life Insurers now use technology to automatically ‘rate’ premiums on-line for customers with health issues. A process that can take weeks when handled manually.
No two people and no two businesses are the same. So why, in the drive towards economies of scale and efficiency, do we aim to deliver these via ‘blunt’ technologies aimed at the ‘Average Joe’. If we fail to acknowledge that people are different then we should not be surprised when they go elsewhere.
Perfecting product rating for a diverse customer base is a great way to begin to deliver a radically better customer experience. And whilst designing creative solutions for a wide range of needs can be a challenge, especially as risks can be complex demanding flexible and intelligent underwriting solutions, the benefits of personalisation have been demonstrated repeatedly. Delivery depends on clever use of technology and without this the Marketing Department remains helpless when competing in a world driven by adaptability, speed and personalisation.