October 18, 2017

Changing customer buying behaviour and the new sharing economy

Charlotta Wark

Head of Financial Digital Channels, Tieto

The financial sector will be disrupted by four key factors. Each of which I’m discussing in separate blog posts.

The turn has come to the final blog post about changing customer buying behaviour.

  • New and disruptive technologies
  • New directives from the European Union
  • Industry convergence and SPEED
  • Changing customer buying behaviour and the new sharing economy

Feelings influence buying behaviour - use this to your advantage

Consumer buying behaviour is, to a larger extent than before, based on feelings rather than facts. This is mainly due to the emergence of social networks and the new experience economy.

Look at brands like Apple or Tesla for instance; we used to study the information sheets of the computer or the car and value things like performance, predictability, safety and reliability. Today the importance of the brand is increasing and the importance of the product itself is decreasing.

We want the brand to feel right, and we make sure to do business with companies and brands that add to our personal brand and the way we want to be portrayed.

Add to that the complexity of the new sharing economy with its Uber’s and Airbnb’s, and we have real dynamite in our hands.

Consumers trust those who provide excellent experiences…

This development is happening at the same time as we see decreasing trust levels in traditional banks. One example of this is the Swedish “quality index” that have been measuring the trust over the past 20 years. Today, banks are at a historical low.

There’s no doubt that the most important trend in the financial sector is to get the customer experience right. You can achieve this by leveraging the technology available in today’s digital world. Use the information and knowledge you have about your customer through the digital trails they leave behind, both in your own systems but also outside of the firewall.

You can use new technology like biometrics, voice commands and AI to make the interaction work smoother and become more intuitive. You can become accessible anytime and anywhere through the open API’s and the cloud. And you can enhance the services by analysing and integrating the social platforms.

But not all services fit all – banks and financial service institutions need to provide different digital services for different customers and multiply the number of available options many times over to be able to provide the perfect customer experience every time for every customer. If you get this right, all interactions with your customers will be seen and regarded as customer service, rather than transactions or advertising, i.e. giving the customers a better experience, which is crucial – now more than ever.

We’re now coming to an end of this serious of blogs about the “Perfect Storm” of the Financial Sector. There are major changes looming on the horizon.

Over the past weeks, and in this series of blog posts, I’ve pointed to the changes that are happening in the financial services industry and the society at large. All of these changes are having a profound impact on our banking industry, so much so that we dubbed the series “The perfect storm”. I return once again to the quote that I started the series with:

“After the storm is over, there will still be banking – but will there be banks?” This will be up to the industry itself, because we, as customers, will make our decisions based on how well our needs and wishes are met.

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Read my previous blog posts here:

Batten down your hatches; a perfect storm is brewing over the Financial Services Sector

New and disruptive technologies changes banking – starting now

New EU directives drive innovation in the financial industry

The need for convergence and speed

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