For years, the power of digital has seen it placed at the top of strategic plans and interventions to streamline and add value to business processes and the bottom line overall. The introduction of digital technologies has undoubtedly impacted on businesses in a real and measurable way, and as innovation continues to speed up exponentially, it is going to reveal yet more opportunities for early adopters to gain a competitive advantage.
Nowhere have we seen greater evidence of this than in the banking and insurance sectors, where growth has taken place at an unprecedented rate in pursuit of operational efficiency to drive better customer service. Customer service lies at the heart of what organisations in these fields do, providing financial services and products designed to improve people’s lives.
At BCG, we maintain that companies that prioritise customer-centricity are able to exceed expectations in several areas: product selection and availability, interaction experience, service quality, channel accessibility, and communications. This remains true today.
But it is here that the disconnect often comes in. The most common mistake companies – South African and international alike – can make is focusing on the technology to achieve those aims, rather than the customer using that tech to access or engage with their product or service. Only by prioritising the entire customer journey from start to finish can banks and insurance companies truly understand pain points that those consumers face and actively map out and develop on-demand solutions that meet their customers’ needs.
Digital is currently one of those pain points in South Africa, where there is still fairly substantial skepticism surrounding its uptake and use – particularly to access financial services and products. This is driven largely by three factors: penetration, usage and price levels.
Although mobile penetration continues to grow rapidly in the country, with research showing that smartphone penetration has surpassed the third mark and sits anywhere between 37 and 45 percent, the challenge emerges in that there is a lack of financial literacy which continues to hamper even the most ground-breaking solutions.
Combined with price levels that are beyond reach for many segments of the population, a fear of being scammed also prevents mobile financial services solutions from reaching their full potential in South Africa.
In order to fully embrace the introduction and roll out of more pioneering solutions that fit seamlessly into customers’ lives, banks and insurance companies are going to have to ensure that they address these concerns while simultaneously creating innovative tools for their customers in order to address and overcome their pain points to provide better service.
There are already examples of solutions like this that are revolutionising the financial services sector and that companies can take heed of and learn from. A notable case in point in the life insurance market is the combination of an app with Uber in order to set up appointments and enable the almost instant dispatch of a health professional to conduct the necessary health tests required for cover.
In the past, there would often be a long wait between completing the application for life insurance and the physical medical examination that is a necessity to get approved for cover. It could take anything from a few days to a week between lodging the application and the actual drawing of blood for testing. Digital has proven to be a game changer because the app allows customers to set up appointments immediately and for the qualified nurse to use Uber to get to the appointment.
By understanding their customers’ pain points, the company in question was able to roll out an on-demand solution that meets their needs and improves their satisfaction levels. In fact, because of the solution, the company has reported an increase in customer satisfaction levels across all LSMs – but particularly lower LSMs, who are able to get cover much more quickly.
Although it might appear a seemingly simple example, it illustrates perfectly the power of digital as a means of improving customer service by eliminating pain points. While digital is by no means a blanket solution or silver bullet to solve all business or customer service challenges and businesses need to adopt an omnichannel approach to how they interact and engage with their customers, it is a critical step in the right direction to introducing innovative solutions that answer real customer needs.
The rewards to be gained by placing customers at the summit of the company’s priorities will ensure that the business is able to continuously introduce what those customers need when they need it – a truly invaluable competitive advantage in the fast-moving financial services arena.
By Adam Ikdal, Managing Partner at BCG