Given the levels of uncertainty and volatility in today’s economic climate, it’s no wonder consumers are turning to their financial service providers for stability and guidance. While inflation is easing, its effects could persist for some time, especially as consumers grapple with elevated living costs and higher interest rates.
The FIS Financial Services Expectations vs Reality research, which surveyed 4,000 consumers and 800 business executives, showed that factors like the rising cost of living (83%), economic recession (79%), high interest rates (76%), and lack of confidence in the financial system (54%) are all weighing on how people make their financial decisions.
With these economic challenges come changes in consumer expectations, so banks and financial service providers must prepare for new and increasing demands. While these organisations face challenges of their own, there are steps they can take to ensure they are meeting their customers’ expectations before their competitors do.
Seeking simplicity: the call for a unified financial experience
At the forefront of consumer demands lies a desire to access and manage personal finances in one place. Nearly half (47%) of the individuals surveyed said that the financial innovation they would most like to see is a single application or platform capable of overseeing all their financial activities across various service providers. Just over half of financial services executives (51%) that responded said they plan to increase investment in developing such technology.
The proliferation of digital technology in the financial services space has in some ways made managing personal finances confusing and, ironically, inconvenient for consumers. But financial service providers have an opportunity to create an all-in-one experience for consumers, empowering them to manage their finances with transparency, and without the need to navigate disparate interfaces, juggle multiple sets of login credentials, or adapt to different functionalities.
The organisations that can deliver such a unified experience, by taking advantage of the opportunities of open banking for example, can gain a competitive edge over their competitors.
Anticipating consumer needs: a technological evolution
While the first cellular telephone came out in 1984, it wasn’t until the late ‘90s and early ‘00s that adoption exploded. Technology companies anticipated the need and delivered on possibilities that consumers had never even dreamed of, with new features and capabilities like text messaging, digital cameras, and internet access.
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Much like mobile phone innovators at the turn of the century, financial service providers are at a pivotal moment in digital financial technology. These organisations have a consumer base that is ripe to adopt novel solutions to their financial needs, but they need to act quickly to stay ahead of their competitors.
This shift towards innovation is evident in the investment plans outlined by the financial services executives FIS surveyed. A significant majority said they are aiming to increase or maintain their investment in various technologies, including fraud and risk mitigation solutions, digital wallets, and cutting-edge advancements such as artificial intelligence (AI), machine learning, generative AI, and the metaverse.
These forward-looking innovations aim to proactively meet consumer demands for seamless, secure, and personalised financial services.
Like with mobile phone developers, there will be clear winners and losers over time as companies either get ahead of consumer expectations or lag behind. While the path of innovation for financial services companies isn’t certain, we are at a fork in the road where executives must make bold decisions.
By investing significantly in technology and embracing a forward-thinking approach, financial service providers can solidify their positions as industry innovators while beating competitors to market. Remaining ahead of the curve will mean not only meeting but exceeding consumer expectations, fostering robust relationships and building trust with their customers.
Mapping the future of financial services
Consumers’ desire for a unified financial platform underscores their need for simplicity, convenience, and efficiency in managing their finances. Financial service providers must acknowledge and respond to this demand by prioritising investments in technology that streamline and enhance the customer experience.
Continuous innovation and adaptation to technological advancements will empower financial service providers to effectively cater to evolving customer needs. By being proactive and predictive, these companies can navigate the dynamic landscape of consumer expectations and cement their status as trusted partners in financial well-being.
Moreover, the evolving technological landscape presents an opportunity for financial service providers to not only cater to existing demands but also shape future trends. These providers can pioneer the next generation of financial services, setting the stage for a simpler, more seamless, and customer-centric future.
Silvia Mensdorff-Pouilly is SVP Head of EMEA Corporates and International Banking, FIS