Retail finance needs to make an Amazonian effort with digital

Did you know that given the chance, if it suddenly offered financial services half of your customers would defect to Amazon tomorrow? According to Qubit’s latest consumer research, a company famous for big brown boxes, big discounting and big warehouses would take half of your customer base in a heartbeat.

There is no shortage of commentators noting that retail finance looks set to be the next sector due great disruption. The Huffington Post notes that Millennials are demanding more Amazon-like experiences from every service provider and banks need to catch up quickly. We’d go as far as to say all customers are making these demands.

Information Age went for the same target audience nearly a year ago and came up with a marked preference for Google as their finance provider but the end result is the same. Delving into the data to deliver real time recommendations, responsive and contextual information, and multichannel access all boil down to a great need for retail finance to adapt or die.

This all goes to show the impact Amazon has had on customer expectations. It also shows the market strength a bank could have if it started to behave like Amazon

No-fuss problem-solving, always-on access, out-of-hours or even same-day delivery and new ideas daily are all reasons why Amazon is leading digital.

Banks can of course argue that Amazon is a digitally native company. It was built on a digital-first framework that lets it be completely iterative. It isn’t hamstrung by decades of legacy systems and arcane regulatory frameworks. But increasingly, neither are banks.

There is so much opportunity for traditional financial services providers to leverage their data and heritage to become fully successful customer-centric organizations.

Emulating three key pillars of Amazon’s underlying strategy is not a bad place to start.

  1. Data today underpins everything. It is the hygiene factor. Retail financial services should be working to de-silo data, enrich it and make it work across the omnichannel. But using data intelligently creates an opportunity for intimate, one-to-one connections with customers and automation efficiencies that it is no exaggeration to say, has the potential to revolutionise retail finance.

  2. Partnering with new, agile service providers whether in enhancing back-end systems through Software as a service (Saas) or managed services, or in creating front-end solutions for more tech-oriented segments is a strong way to follow Amazon’s service example. Amazon may have huge warehouses but it can’t provide everything. For the things it can’t, it finds the right partners who can.

  3. Trust has been paramount to setting Amazon at the top of the retail tree. Incorporating genuine customer reviews from the start, creating full price transparency (“product is cheaper from these sellers”) and no-quibble customer service brought the customer on-side even in the early days of ecommerce when buyers were wary. Prioritising building trust is one of today’s ‘must do’s for retail finance.

Getting started building a truly customer-centric, omnichannel organization is daunting.

So download our latest finance report for all the insights you need to deliver a first-class customer experience.