What Financial Services Companies Can Learn From GAFA
It’s no secret that technology is changing the way business happens, and financial services companies need to understand this digital transformation in order to compete in 2019.
Customer experience is more important now than ever. As technology has advanced, GAFA (Google, Apple, Facebook, Amazon) has notably changed expectations that consumers have for all companies, not just tech companies.
This series will explore various facets of Digital Transformation, equipping your marketing team to respond and adjust to keep up with today’s consumers and their expectations. Read the first post, second post, and third post in this series.
What Financial Services Companies Can Learn From GAFA
Pursuit of digital transformation has made GAFA (Google, Amazon, Facebook, and Apple) almost unrecognizable from the businesses they originated as. These companies are setting the standard for what consumers expect when it comes to anything in the tech, digital, and financial realm. GAFA is so ingrained in the lives of consumers, and there are many things financial services companies can learn about digital transformation from these forerunners.
GAFA’s products and services are impressive, but looking past that to see why and how they became successful is where we can gather some actionable insights.
So what can we learn from GAFA?
Automation and machine learning have been employed successfully by Google across their full suite of products. Google seeks to take the information it has obtained from users to transform manual processes to digital, and to make digital processes even more intuitive. A personalized feed was introduced in the Google App in 2017 that proactively delivers content based on previous search behavior. Google Maps, when opened, will suggest routes based on time of day and previous travel patterns. A Google search for an upcoming vacation destination will also deliver confirmed travel information that might have otherwise been buried in an inbox.
And let’s not miss the opportunity to talk about Google Home! Google’s smart speaker/home assistant has changed the way people interact with their homes. From basic requests, like getting the weather or playing music, to more advanced app set-ups, like turning on lights or starting your smart vacuum, Google Home has endless possibilities. This has changed consumers’ expectations of home assistants and having access to information on demand.
As users’ needs are anticipated and met by these services, they become more integrated into the Google ecosystem. The question that financial services companies must ask is: How can the information our customers provide be leveraged in a way that makes necessary processes easier and more natural?
One example of how automation can anticipate a customer’s needs is through website chatbots. As discussed in this blog post, chatbots offer a way to engage with customers at any time, regardless of typical office hours. Keywords they provide in their interaction with the bot can lead to immediate assistance for something as simple as website navigation, or even help with complex technical issues.
Amazon Prime is a “prime” (pun intended) example of the reward of a strategy focused on customer experience. The Prime membership program made customer convenience a central tenant with the goal of creating loyal customers. In 2005, free 2-day shipping was a novel perk. Today it is the consumer expectation for all online retailers.
Amazon Prime has continued to expand its services, seeking to grow its membership numbers by making consumers’ lives easier. Entertainment streaming, grocery delivery, and digital photo storage are all standard benefits of the Amazon Prime membership program (among other things!).
With membership numbers surpassing 100 million in 2018, we see that consumers respond with loyalty to companies that provide solutions that simplify their lives and integrate into their everyday lives seamlessly.
It is difficult to understate the impact Facebook has had on the way business is done. Prior to Facebook, there were few options for financial services companies to grow an organic, local following. As Facebook has implemented more tools for businesses, local advisors and agents have been given an incredible opportunity to connect with their local markets.
In a previous post we discussed how to achieve a better click-through rate with mobile advertising. One of the key takeaways from that post was that “many consumers don’t have an intrinsic connection with a national brand logo, but they can create a tangible connection with an insurance agent or financial advisor who offices down the street.” Facebook has created the tools needed for businesses to deliver hyper-targeted local ads, connecting with a consumer on a personal level.
In creating these tools, Facebook realized the power of connection to drive engagement. Financial services companies can strive to maximize engagement by defining the right audience, crafting a message specifically for them, and then utilizing the tools Facebook provides to pursue connection and growth.
Apple is widely known as one of the original disruptors, changing the world forever with the iPhone. Seeking to shake up another industry, Apple announced Apple Card in March, a new kind of credit card which is “built on the principles of simplicity, transparency, and privacy.”
Unlike other releases that have arisen out of its ability to be on the forefront of new technology, Apple’s diversification is driven by necessity as much as anything. Analysts state, “Apple’s hardware division has reached its peak, but revenue continues to grow because of the higher average selling prices for iPhones and the growth of its services business” (source).
The Apple Card offers all of the consumer-friendly features customers expect from a credit card and more. On top of above average rewards and useful personal finance tools, Apple Card offers a level of privacy and security for credit card transactions through its integration with iPhone security that no one else can.
Apple has leveraged their existing technology in a new way, enticing new customers with exclusive features and increasing the barriers for change for existing customers.
GAFA’s ability to innovate and deliver experiences that were previously unknown has changed the landscape of expectations for all consumers, regardless of industry. They have flipped the script by successfully anticipating the needs of consumers with technology, rather than reacting to the market. (And in many cases, they have actually created the need. Nobody knew we needed touch screen phones until they were manufactured, etc.) It is important for financial services companies to look to leaders in tech and innovation, and consider how these insights can be implemented in their own companies.
The pursuit of digital transformation is a noble one, and if done right, can have an incredible impact on consumers’ lives, the bottom line, and the industry.