In a bid to catch up to customer experience leaders, the Financial Service Industry (FSI) is increasing its digital marketing spend more so than other sectors, according to research from Adobe. However, the sector’s unique problems around regulation and legacy technology means greater organisational change will also be necessary.

70 per cent of FSI organisations are planning to increase their digital marketing budgets this year, as they fend off agile, customer experienced driven fintechs, according to the Adobe report.

The increased spend is a global trend but for APAC FSI organisations the number climbs to 78 per cent, with 21 per cent planning on keeping digital marketing budgets the same and only one per cent of APAC FSI organisations looking to spend less.

  • Richard Wheeler, Adcloud Specialist at Adobe will be discussing the study and how FSI organisations in APAC can  meet the customer experience challenge in a live webinar on October 19th. Register for the free webinar here.

The Adobe report, 2018 Digital Trends in Financial Services, was conducted in conjunction with Econsultancy and surveyed 700 FSI senior leaders as part of a wider global study. It found digital marketing budgets were increasing in most sectors but FSI was ahead of the average mark by four per cent.

Source: 2018 Digital Trends in Financial Services

According to the report, the increasing FSI budgets will go towards marketing automation, personalisation, lead generation and lead management, audience and data management, and marketing analytics.

The CX imperative

For FSI incumbents much of the competition and the imperative to improve is coming from either smaller more agile fintechs able to respond to customer needs quickly or from established technology companies raising the standards for experience and moving into the finance sector.

The increased competition is a new challenge for a sector that traditionally had just a few established major players and customer expectations were at manageable levels. But now, amidst the newfound competitors and digital disruption, the industry has begun to focus on customer experience as both a necessity and, for leaders, a key differentiator, according to the report.

More than a quarter of FSI organisations rank optimising the customer experience as their top priority this year, 10 percentage points more than other sectors. CX is also the primary way FSI organisations will differentiate themselves over the next five years, according to the report.

Less than one per cent of FSI organisations now see price as a differentiator and a scant amount nominated convenience as their difference maker. Mobile, design and unifying offline and online experiences also polled lowly, suggesting FSI organisations realise effective customer experience is a more sophisticated challenge.

The key to meeting that CX challenge is “optimising the customer journey across multiple touchpoints” – something the FSI sector is now prioritising more than other sectors, according to the report.

Source: 2018 Digital Trends in Financial Services

However meeting that challenge requires a shift in thinking and organisational structure, according to the report authors. They argue the structure of an FSI organisation must now “reflect the fluid nature of the customer journey”.

“The rigidly demarcated channels that characterise many incumbent businesses can prevent a joined-up and omnichanel approach. It is paramount that companies can both surface and share data and insights relating to cross-channel customer activities with teams, processes and software that transcends the boundaries that have historically divided teams within large organisations.”

A legacy of tech problems

Sharing data with a view to unify customer journeys is a challenging prospect for any large organisation but is perhaps even more daunting for FSI organisations.

The Adobe report reveals FSI providers are experiencing a “particularly challenging time” with technology.

Adobe’s parent research found companies are significantly more likely to be successful if they have flexible, joined up technology. However, FSI are struggling with what the report calls a “legacy curse”.

46 per cent of FSI organisations said technology was “difficult to master” – nearly 10 points more than the the average of all sectors. Even among leaders there is a considerable gap – just seven per cent of FSI organisations have a “highly integrated cloud based technology stack” compare to the average mark of 12 per cent.

The lag is somewhat understandable for a sector with tight regulation and organisations often relying on monolithic legacy systems. However, with competition increasing, consumer expectations rising and potentially more disruption coming through open banking in Australia, those excuses will mean little to customers.

  • Richard Wheeler, Adcloud Specialist at Adobe will be discussing the study and how FSI organisations in APAC can  meet the customer experience challenge in a live webinar on October 19th. Register for the free webinar here.

About the author

Joseph Brookes is a writer for the Which-50 Digital Intelligence Unit, of which Adobe is a corporate member. Our members provide their insights and expertise for the benefit of the Which-50 community. Membership fees apply.

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