Seismic changes in UK policy and legislation could be negatively impacting the UK financial service industry’s ability to build a globally competitive digital customer experience.
According to an international study commissioned by identity data intelligence specialist GBG and conducted by Forrester Consulting, the UK financial sector is lagging behind China, Singapore, the US and Australia in adopting new approaches to authenticating customer identity.
The findings show that 84 per cent of UK financial service firms – spanning incumbent institutions as well as fintechs and challengers – are concerned about their ability to identify customers. Traditional financial service firms in the UK are less focused on new technology solutions to address this and appear more inward looking, more focused on cost-control, and less inclined to invest in new technology than their global counterparts.
Major regulatory changes this year including Open Banking and GDPR, as well as ongoing Brexit negotiations, are impacting the sector. At the same time customer expectations continue to rise as a result of digital empowerment and great experiences from the likes of Amazon, Apple and Facebook.
In 2018 we’ll see unprecedented change in the financial service sector. At the same time, consumers are increasingly happy to use everyday digital services provided by organisations from across the world.
According to the Forrester study, financial service firms will live (or die) by delighting customers via digital channels. A tough economic environment, increased regulation, and greater competition have created challenges for incumbent financial service organisations; on the flip side fintechs delight with great experiences but lack the strategic execution to comply with regulatory requirements.
In order to improve customer retention, loyalty, advocacy and customer satisfaction, UK financial service firms need to address the gap between their approach to new technology and that of their global competition.
Financial service firms should build relationships through services that exceed customers’ current expectations and anticipate their future needs, improving financial wellbeing.
Mick Hegarty, Managing Director at identity data intelligence specialist GBG, said: “Our research clearly shows that without fintechs, the UK financial service sector is seriously lagging behind its global rivals when it comes to new technology and investing in the digital customer experience. Although the UK is currently behind the rest of the world in this area, there are some promising signs for the future. UK-based fintech innovators and challenger banks are more interested than the established banks in adopting new approaches and more are planning to increase investment in the next 12 months. This will prove vital to the UK financial service sector in keeping pace with the rest of the world.”