Autonomous finance is here and it's reinventing customer expectations
The kettle’s on, the morning birds are singing and the sun is rising alongside customer expectations. It’s important that fintech and financial services brands wake up bright and early to the new reality — autonomous finance has arrived and those caught sleeping will be left behind.
In their The Dawn of Autonomous Finance report, Forrester defined autonomous finance as “algorithm-driven services that make financial decisions or take action on a customer’s behalf.” It’s all about saving customers’ time and money. Solutions that offer personalized, data-backed recommendations showing an understanding of the customer, and the best interest of their wallets, are the way forward. But it is not a one-sided matter — brands stand to benefit from a shift to autonomous finance too. Adapting to the new normal of customer expectations will offer brands improved customer retention and a better understanding of consumers, unlocking further potential for growth.
The opportunity is no longer on the horizon: it’s here. In fact, you may have already come across examples of autonomous finance in practice. Chatbots that enable customers to make changes to their accounts, or that guide them through their customer journeys, are increasingly common. So too are robo-advising solutions, which make use of data and enable customers to manage their own investments with a few clicks. Although these are examples of evolution rather than revolution, the momentum is building.
Read on for an overview of what you should know about the evolving customer expectations, the state of the industry and the benefits of autonomous finance.
Customers expect more than ever before
In the latest Salesforce State of the Connected Customer report, which surveyed over 15,000 consumers and business buyers, 68% reported that COVID-19 heightened their expectations of companies’ digital capabilities. What’s more, 66% of customers shared that they expect companies to understand their unique needs. These findings underline just how important it is to have a deep understanding of your customers and the potential for AI to play a lead role in making that happen.
Although customer expectations are high, they’re not necessarily being met. Only 27% of customers feel that financial services brands are fully customer-centric and less than half of customers responded that they “generally trust companies.”
The lack of trust in particular represents an obstacle when it comes to autonomous finance. For one thing, autonomous finance relies on personal information and rich customer data — things a distrustful customer is unlikely to volunteer on a whim. It is imperative that brands prioritize transparency from the outset in an effort to build trust, clearly outlining what data is being collected, why it is being collected, and how the collection can benefit the customer. For brands, there is potential here to highlight how their data is fundamental to creating relevant personalized experiences.
Encouragingly, comfort levels surrounding AI and automation are on the rise. Salesforce also found that in 2020 there was a 6% increase in terms of customers who “can think of an example of AI they use every day”. Further, Forrester discovered that one-in-five U.S. online adults agrees with the statement “I trust computer algorithms can make good financial decisions on my behalf.” Forrester also revealed positive trends in terms of generational nuances, with Millennials and younger customers showing even more willingness to wade into the waters of autonomous finance.
When you consider evolving customer expectations — and factor in that, for many, the world of personal finance is daunting — the opportunity to add real value with autonomous finance becomes clear.
Solutions will be customer-centric, pure and simple
It’s time to talk finance at the breakfast table.
That’s not something you hear everyday, due in no small part to how uncomfortable many feel about the subject. “Anxious” — that’s the word 35% of online adults in the U.S. used to describe how they feel about their financial situation, according to the Forrester research. In the U.K., 17% responded with the word “uncertain.”
Financial literacy is an ongoing challenge. A notoriously jargon-heavy industry is made more complicated by the intricate web of products a customer is likely to have across several different brands. A typical customer might have their investments with a fintech company, their checking account with a traditional bank, mobile payments through a techfin, credit cards from different institutions, and their insurance policies, mortgages and student loans in a myriad of other places.
The cognitive load being placed on customers is high and the demand for simplification is growing. Across 12 different industries within the Salesforce report, customers ranked financial services in the bottom three in terms of customer-centricity, product quality, service/support quality and responses to 2020 crises. When customers seek guidance, they are finding clarity hard to come by — even after waiting on hold for support or reading dense product descriptions.
Brands that prioritize customer-centricity and CX will reap the benefits. Remember that the early bird gets the worm.
Autonomous finance shows promise for customers and brands alike
Autonomous finance introduces a number of benefits for both brands and customers that can help remedy customers’ changing expectations.
Benefits for customers
- Simplicity: By its nature autonomous finance requires less manual effort from customers. This means less time performing SWOT analyses and reading product manuals and more time for the things customers enjoy.
- Cost savings: An algorithm-driven approach will be able to save customers money by understanding their needs, behaviors and goals, and optimizing their portfolios.
- Proactive support: Autonomous finance unlocks proactive support whereby conversations are prompted when a customer demonstrates certain behaviors. It’s hassle-free and better yet, it can all be personalized.
Benefits for financial services and fintech brands
- Better understanding of customers: AI can understand customers, individually and collectively, directing brands to areas of opportunity.
- Competitive advantage: According to 89% of financial service leaders from the Salesforce study, those first to implement autonomous finance will set a new baseline for CX. Customers will follow.
- Improved efficiency: Automated solutions can speed up processes, clear bottlenecks and enable creativity and innovation for the benefit of your customers.
Two things are certain in our new reality: autonomous finance is here and customer expectations are higher than ever. The brands that take a customer-led approach will be in the best position to rise to the occasion.