Financial service providers will need to adapt quickly as the post-COVID market glow fades into a harsher reality lit by rising volatility, higher costs, new technology and changing consumer demands, a new Invsta white paper concludes.
The trend analysis by the Auckland-based fintech firm says the financial services industry should focus on four “key drivers” to steer through the post-pandemic landscape, namely: broadening the client base; designing a ‘digital transformation’ plan; simplifying processes; and, enhancing customer engagement.
For example, the Invsta report says all financial firms, including incumbents, can more easily access the growing mass-market and youth demographics with technology.
“… those that identify strategies to leverage these opportunities will see huge improvements to their bottom line,” the paper says. “Whether you decide to expand your reach using your existing product set or develop a new offering to directly target this new market, this is an effective way to grow your customer base.”
But flexibility will also be crucial in developing digital transformation strategies, the report says, given the ever-changing nature of technology.
“By making incremental changes, employees, investors and project managers have time to adapt and evolve with any changes made to business processes and workflows,” the Invsta study says.
Automation and digitally enhanced work processes will also simplify the experience for clients as they negotiate often-complex financial services products, burdened by regulation and legalese.
“From an investor perspective, simplified digital processes offer a much better experience, resulting in improved satisfaction scores,” the paper says.
Finally, the report says financial services providers must encourage “investor engagement at every point” amid increased demand for information and support from the always-on investment generation.
“Increased engagement and hyper-personalisation will become the new basis for differentiation once speed and cost efficiencies become the norm,” the study says.
Rachel Strevens, Invsta founder, said in a release that the COVID-era success of new direct-to-consumer investment platforms, for example, highlights why “incumbents need to start prioritising their online experiences to attract and retain modern investors”.
“The investment space is becoming more competitive every day, with new digital platforms constantly taking away market share from incumbents,” Strevens said.
Established in 2016, Invsta builds front-end and back-office software tools for fund managers, financial advisers, KiwiSaver providers and other wealth management firms.
Among others, the fast-growing Aurora KiwiSaver, now at $100 million plus, uses Invsta to sign-up clients and manage member engagement.