The Customer Engagement

Imperative for Financial Services

Best Practices for the Financial Services Industry

Contents
Executive Summary
Major Changes for Financial Services

Executive Summary
1
1

Customer Engagement in the Marketplace

Best Practices in Customer Engagement

Understanding the Customer Journey

Dont Just Sell, Educate

Leverage Existing Big Data

Embrace Multiple Touchpoints

Predictive Analytics and More

Relevant Offerings

Omni-Channel Commerce is
Not Just Digital

The Tangible Benefits of Omni-Channel

Maintaining a Culture of Customer

Engagement

Banks and insurance companies have operated

for hundreds of years enjoying complete control
over the supplier-customer relationship. This has
historically been a sellers market, but times have
changed. The past decade has seen the industry
transform into one where the customer wields
substantially more power.
Financial services institutions seeking to remain
competitive must better engage their customers
using an omni-channel approach, numerous touchpoints, and real-time data to connect in ways similar to other retailers. The marketplace demands it,
technology enables it, and leading edge influencers
are making it happen.
This paper discusses best practices for customer
engagement through examples and definitions. It
also highlights strategies that financial services
companies can use to become leaders in customer
engagement.
The Customer Engagement Imperative for Financial Services

Major Changes for

Financial Services
For some consumers, products and services promoted by
financial institutions are considered mundane, and traditionally
exhibit lower levels of customer engagement. People may buy
mortgages, insurance, and savings plans because they feel
they have to, but few customers express the opinion that these
institutions truly have their best interests in mind.

and compare prices and terms through a variety of digital

touchpoints. Loyalty is becoming a hard-won and fleeting
commodity, and granite buildings do not impress as strongly as
personalized mobile apps.

For years, the chief generator of business for these institutions

was their brand. Banks established a strong physical presence
in the community literally. Their buildings were first made of
stone and later housed within a citys tallest towers, cementing
the perception of strength.

Todays customers are both educated and empowered. They

expect more from every company they do business with,
including those in financial services. Even where local laws
hinder new banks from establishing a presence, their products
and services are being noticed, and are expected to be
matched. The customer is in control, and the market is being
forced to respond.

Over the past few years, the rules of commerce have changed
radically, and there has been a rapid transition into a buyers
market. In the retail arena for consumables of all types
customers do not just shop. They conduct extensive research

The new imperative is customer engagement a direct and

personal interaction with each individual customer, delivering
relevant content and personalized opportunities, using data
and technology to win and retain business.

Customer Engagement in
the Marketplace
MoneySupermarket (www.moneysupermarket.com) is a onestop online shop for a wide variety of products, from loans to
insurance and from travel to mobile phone plans. An extensive
selection of comparison engines helps customers search
across a range of providers, and community pages provide
financial and budgeting advice alongside discount vouchers to
local restaurants. MoneySupermarket uses a distinctly nonbank approach to selling financial products and generating
interest, not merely for the first sale, but for repeat business
and continuing customer engagement.
This approach represents the new style of digital marketing,
where experience is more of an active concept driven by the
customer, rather than by the institution. Compared to more

traditional approaches where consumers may not have fully

understood what they were buying, or where it was difficult to
gauge whether one insurance policy was better than another
a wide range of comparison engines and advice pages now
allow for complete involvement and commitment.
This non-bank image is attractive to customers who dont trust
the old-school branding of some institutions. High-interest
credit cards, low-yield savings accounts, and excessive user
fees have tarnished the reputation of retail banking, as have
stories of claims denials and rising premiums in the insurance
industry. Where there were once only a few choices there
are many, and consumers are recognizing the advantages of
working with newer organizations eager for their business.

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The Customer Engagement Imperative for Financial Services

Best Practices in Customer

Engagement
To meet evolving consumer expectations, financial services
firms need to employ a variety of new strategies to engage
customers. These may require new ways of thinking about
consumers and a more nuanced understanding about their
own products and services. They may also require some
experimentation and a certain degree of agility.

Understanding the Customer Journey

The first step in this transformation is to understand
specifically how consumers relate to vendors and purchase
products, and then use this ongoing knowledge to provide a
better purchase experience.
Consumers are spending more time researching the products
they wish to buy, including complex products offered by the
financial services industry. This process might start with the
consumer clicking on a strategically-placed banner ad on a
financial services blog, or in response to a promoted post on
Twitter. It can lead to a request for a free quote, which can
be moved forward through an on-screen chat session, and
may culminate in a meeting with an insurance agent, ideally
in the customers home, aided by tablet-based support and
registration software.

Dont Just Sell, Educate

Financial services companies are already experienced in
marketing the complex products and services they provide,
but they have always done so at a high level. This isnt enough
to capture the attention of todays consumer, who expects to
learn about how these products and services will fit into the
context of their lives.
Mortgages, for example, can be extremely complex and
difficult to understand, purchased by most people during
periods of great apprehension, hope, and emotional turmoil.
A home remains the largest purchase most people will
ever make. It also represents years of financial obligation.
Mortgage institutions and agents should not lose sight of the
considerable commitment a mortgage represents for the
average person.
Proactive mortgage brokers, financial institutions, realtors,
and alternative finance sources are recognizing that the
education process must move further, including assisting
clients in selecting adjustable rate loans, or guiding
them towards shorter mortgage terms through the use
of prepayment privileges and strategic borrowing. These
professionals recognize that each of these customers is a
potential source of additional business, as well as referral
business.

Leverage Existing Big Data

One of the greatest advantages financial services firms have is
the vast amount of data they own about how their customers
use their products. For example, retail banks have data about
the checks consumers write, the bills they pay, as well as
when and where they use their debit and credit cards.
This transactional data, properly leveraged, can provide a
wealth of information for the bank, and also for the consumer.
The bank can use data to anticipate the next product a
consumer might want or need, or it could use it to offer
budgeting and savings advice.
Data has a powerful ability to provide deep insights to surprise
and delight customers and keep them loyal. This data
also provides a competitive advantage, because it cannot be
easily replicated by other financial services providers. As
such, it needs to be factored into truly engaging touchpoints
advice, guidance, illustrations and infographics, dashboard
summaries, and opportunities for money saving or other lifeenhancing events.

Embrace Multiple Touchpoints

When dealing with a provider of any type of product or
service, the customer expects to have a seamless experience,
regardless of device and touchpoint.
This is the omni-channel nature of the customer journey
and purchase process, and there will be more touchpoints
required. The financial services and insurance industries have
companies some old, some new aiming to disrupt it.
Google and PayPal, of course, fit into this bucket, but so do
brand new lenders and international companies entering new
markets. These innovators are bringing new techniques that
challenge old approaches, and speak the language to address
the needs of the modern customer. An example of this is
usage-based insurance.

Predictive Analytics and More

Relevant Offerings
With todays advanced digital marketing tools, companies
know more about their customers and the micro-segments
they fit into individually and geographically. Many customers
voluntarily provide personal details about themselves, their
preferences, and their behaviors, allowing companies to
generate targeted relevant campaigns and offers for new
services and tailored bundles.
One example of this might be when a high-value, premium
customer switches insurance companies, and the original
company wants them back. 360-degree profile data may show
that the customer has a new spouse or a new teenage driver

The Customer Engagement Imperative for Financial Services

in the family, has moved to a new address, or purchased a

new home or car. Predictive analytics enable the company to
identify the right time and the right message to reach out to
attract the customer back with a relevant, personalized offer
and a higher likelihood of conversion. Contact can be made
through the means that the individual expressly prefers, via
email, postal mail, one-on-one interaction with an agent, or
any appropriate channel.
This can be expanded into pricing insurance rates based on
an analysis of driving behavior verified by an onboard device
installed in the customers vehicle. This form of usagebased insurance is representative of the new approach to
the insurance relationship high-frequency, high-touch,
data-driven, with the customer in a direct and real-time
relationship, which includes a heightened sense of control.
Insurance clients can control their own premiums by modifying
their driving habits. Frequently traveling over the speed limit
may seem of little relevance within the context of a onceper-year insurance renewal, but if the analysis results in a
connection between changes in driving habits and increased
or decreased monthly premiums, it motivates and empowers
customers, and enhances their relationship with their
insurance vendor.
Auto insurance products which consider the factors related
to driving habits and pay-how-you-drive are available from
a number of companies, including Allstate Drivewise and
Progressive Snapshot in the USA, plus AXA Drive Recorder in
Europe.
A similar scenario applies to banking, where branches need to
generate new customer leads and offer more relevant services.
It makes little sense to place a mortgage loan officer inside a
branch where few people will walk in to transact business. The
early stage of the purchase process is now online. Face-to-face
interactions with experts should happen later, by appointment.

responsibility. Alternatively, promotions for long-term savings

plans for a childs education might be more popular in early
fall. It is no longer up to the institution to make this decision. It
is up to the institution to analyze user data to determine ideal
sales and support opportunities.
Traditional banks provide online banking services, and some
present internal bank advertisements for credit cards or
other products. But the crucial part of the omni-channel
solution is the capacity to deliver real-time next-best action
recommendations, similar to a Netflix movie prompt or an
Amazon purchase suggestion. Many banks do next-best
activity recommendations already, using a limited subset of
the data hard facts like age, social demographics, where
customers live, and account balance.
Real-time and upsell data analysis is needed, along with
additional behavioral information. What banner did the
customer hover over but not click? What eye beacon, such
as an ATM, did a customer walk past last week? How often?
These points represent big data, which is unstructured and
consequently much harder to process and store. It is this type
of data that leads to a guided quotation process to determine
a customers interest in purchasing additional insurance or
financial products. An accurate profile is extrapolated from the
multiple touchpoint experience.
The more questions they are asked, the less likely customers
are to complete the purchase, and the higher the chance of
losing them. With complex products, the customer conversion
process must be broken into different stages, with value
delivered at each step. A vendor cannot ask a hundred
questions, and then give an answer. They must ask five
questions, deliver part of the answer, then ask another ten
questions, and give another part of the answer, leading the
customer along a path of achievement and positive feedback
that eventually leads to a full sale.

Omni-Channel Commerce
is Not Just Digital

The Tangible Benefits of

Omni-Channel

Omni-channel marketing is the combination of numerous

and frequent touchpoints whatever the customer chooses.
Providers of financial or insurance services must review
their strengths and areas for improvement in the sales cycle.
Person-to-person interaction, for example, is generally more
effective at the end of the sales cycle, helping to create trust
and close the deal. But it is becoming less effective at the
beginning of the sales cycle, and can be accomplished through
digital touchpoints.

The benefits of moving to omni-channel engagement are

wide ranging. For lead management, omni-channel facilitates
the integrated and contextual engagement process from the
origination of the lead across all other media. This develops
into an extension of the insurance lead process, for example,
by providing personalized policy selection and pricing, and
driving a consistent customer journey toward the policy.

Opportunities for upselling and cross-promotion are far more

powerful through omni-channel, and customers can lead
the way by clicking prompts or notices that relate to their
current interests and priorities. For example, a budgeting or
bill payment calculator might appear as a free post-holiday
app, when credit card bills appear and tax season approaches,
capitalizing on their renewed commitment to fiscal

Onboarding is made easier by allowing the quote to be

concluded through any channel, whether self-directed or with
agent assistance.
Financial services companies can mitigate channel conflicts by
including agents and brokers in the cross-channel purchase
process. This brings increased business flexibility by providing
an agile platform to reconfigure bundles quickly and manage
complex processes across channels and partners.

The Customer Engagement Imperative for Financial Services

Customers are engaged and served wherever and however

they prefer, which fosters top line growth by helping agents
and brokers become more productive and optimize conversion.
Cost savings can be realized through reduced claim and
service cost, using online self-service opportunities integrated
with call centers and best practice templates.

Maintaining a Culture of
Customer Engagement
Financial services companies should not restrict their vision to
their industry competitors, but should observe the online retail
world as a whole. Financial products are products to be sold
and purchased like any others. Up-to-date methods to locate
and curate customers are required to reach the goal.
Consumers the world over have reset their expectations based
on their experiences with innovative companies like Apple,
Google, and Amazon. People who have never, and may never
make an online purchase, are observing a significant shift in

the availability of free information through services such as

Google StreetView. At one time, these services would have been
proposed, studied, and funded before any activity started. Yet, in
the digital age, these services have not only been created, but
have essentially been made available for free. Such experiences
lead to a culture of expectation, where suppliers must exist on
an equal plane as customers to remain competitive.
If insurance companies, banks, lending institutions, and other
traditional financial services players fail to meet the new
customer engagement mandate, they will see newer and more
agile entities move in to dominate financial services as they
have already done in the music, entertainment, publishing,
advertising, and retail industries. Google is delivering insurance
quotes in the United Kingdom, and Apple Pay is native on more
than 40 million iPhone 6s sold since its launch in October, 2014.
To get ahead and stay ahead, financial services companies must
immediately start thinking and acting like the new generation
of technology-savvy customer engagement leaders. And this
means creating and maintaining ongoing conversations with
their customers.

About hybris software

hybris software, an SAP Company, helps businesses around the globe sell more goods, services and digital content through every touchpoint, channel and device.
hybris delivers OmniCommerce: state-of-the-art master data management for commerce and unified commerce processes that give a business a single view
of its customers, products and orders, and its customers a single view of the business. hybris omni-channel software is built on a single platform, based on open
standards, that is agile to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be the last commerce platform companies
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including global B2B sites W.W.Grainger, Rexel, General Electric, Thomson Reuters and 3M as well as consumer brands ToysRUs, Metro, Bridgestone, Levis,
Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. hybris is the future of commerce. www.hybris.com | sales@hybris.com
Version: May 2015 Subject to change without prior notice hybris
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