Increase simplicity for the advisor and the client by efficiently managing complexity in the backend!
We live in an overwhelming world, especially so for banking clients. Every day new apps and opportunities advise on how to invest your money or on how to improve your finances. Despite all that, financial education is still at a low point and people don’t like to think about their finances. Under such circumstances how do you stand out and engage with clients while offering them what they need?
Focus on offering the best experience and not on having many functionalities
It seems that among some financial institutions “more is always better” is still a widely spread notion. Offering an abundance of functionalities in offline branches, apps, or online banking portals does not help established players win new clients. Neither does having every conceivable app or participating in the latest tech trend. Moreover, pushing funds, insurances, or other investment products does not inspire anyone to buy. It is just an attempt to scream the loudest. Competing based on product features, price, or marketing budget won’t get them far either.
What clients want is a solution. Instead of focusing on what products, banks happen to have and trying to convince clients that they have a problem, finding a solution is key. Everybody likes to discover new solutions, so the clients should discover how a financial institution can help them with their concerns.
Let’s play through an example: You aim to offer a retirement investment product. One option is to tell your clients that they are going to need more money for early retirement. For this, your clients have to go through a lengthy questionnaire, bank statements, and masses of documents. And in the end, they find out that they won’t have enough money and should buy product XYZ. Not very exciting.
How about using technology? By doing so, your client can add current accounts, investment portfolios and real assets (like real estate), all via API and done automatically by smart software. After this process, you can indicate the potential retirement gap in a simple number: the probability of reaching the retirement goal. If that number is low, you offer to take care of this and let the client invest without much fuss. Over time you keep the client updated by showing how the probability changes according to market movements, saving habits and other factors. The client doesn’t care about the backend product as long as that probability goes up. To clients, it is important that their needs are your top priority, not the product.
Seamless integration and Simplicity
To achieve seamless integration and to build a simple application that is both fun and efficient to use, I want to propose a motto: Manage the complexity, so your client can enjoy simplicity.
A single probability score relies on a lot of complexity. To be precise, here are some examples: Connecting the different APIs to information providers, checking markets and calculating the probability, keeping an eye on account transactions checking if there are any changes for the client. Amid all these complexities, it is essential to pay attention to the integration between accounts, your backend, the frontend systems, and the investment product. Only through handling the complexity for your clients, you can win them over. A potential client that has to jump through countless hoops to connect the problem (e.g. retirement gap) to a solution (e.g. your investment product) won’t become a client.
The same applies to different functions that try to give your clients a better understanding of their financials. When a client has to use 5 different apps in order to get a view of all assets, those apps won’t be used at all. Everything needs to be seamlessly integrated:
● Wealth aggregation that gets connected to financial planning.
● Current account analysis that automatically leads to the retirement gap.
● The retirement gap that can be filled automatically with the right investment product.
● Progress report based on the product’s development and current account status.
● The better integrated all these functionalities are, the better a client perceives your offering.
To sum it up: Make sure to offer smart features, but not only for the sake of having them, rather have a simple and coherent process. Have a strategy on how to integrate new features into a compelling customer journey that seamlessly leads from one offering to the next. This will let your clients perceive taking control of their finances as easy because they will have trust in you to handle the complexity.
See how simplicity can grow out of complexity: