Pain points being experienced in the financial services industry today. 

What are the pain points being experienced in the financial services industry today and what is the relevance to your business development plan?

Why are industry pain points relevant to business development planning?

All industries experience pain points throughout every business cycle. We at WiRD have found that it is important to understand these pain points before starting our business development plan. By doing this we are able to focus our business development plan on any opportunities presented by these pain points as well as look for opportunities to differentiate our products and services in a way that is meaningful to our clients in these markets.

What are financial services industry pain points?

At WiRD, we understand financial services pain points to be the challenges that financial services companies face in their day-to-day operations. These pain points can be related to compliance, regulation, competition, customer expectations, or technology.

Why are pain points relevant to business development planning?

WiRD’s view is that any industry’s pain points are relevant to business development planning because they can help organisations identify opportunities for growth. By understanding the pain points that their customers are facing, organisations can develop solutions that address those pain points and attract new and repeat customers.

Understanding the financial services industry pain point’s evident in today’s financial services markets

We list below the financial services industry pain points that WiRD encounters when working with our national and international financial services clients. They represent the most prevalent pain points we encounter and are therefore not meant to be a comprehensive list of all financial services pain points. 

These pain points can make it difficult for financial services companies to stay profitable and grow their business. However, financial services companies that can overcome these pain points will in our opinion be well-positioned for success in the future.

• Cybersecurity threats: In our view and that of many of our clients, the financial services industry is a prime target for cyberattacks. This is because financial institutions hold a lot of sensitive customer data. Also, as financial services organisational boundaries become more permeable to allow for industry-wide collaboration and industry-wide cross selling and up selling the level of security need increases exponentially.
• Digital transformation challenges: From our perspective the financial services industry is undergoing a digital transformation. This means that financial institutions need to invest in new technologies and adapt their business models to meet the needs of digital customers. But going digital is not as simple as it has been made out to be. Migrating to a digital business model is a complex and challenging process for financial services organisations. There are many factors that can make this process very difficult, including legacy systems that are not designed for the digital age, non-digital cultures within the organisation that are risk-averse and resistant to change, financial services regulations that are not digital friendly and significant skills gaps when it comes to skilled workers with the knowledge and expertise to implement and manage digital transformation projects.

• Competition from FinTech startups: It has become evident to us at WiRD that FinTech startups are using technology to disrupt the financial services industry. This can be a challenge for traditional financial institutions, which may not be as agile or innovative as FinTech startups. Particularly as startups tend to cherry pick the products and services with the greatest value and the least overhead. 
• High customer acquisition costs: As far as we can see, it can be expensive to acquire new customers in the financial services industry. This is because onboarding processes are often cumbersome and onerous from a regulatory perspective.
• Low customer retention rates: In our experience customer retention rates are also relatively low in the financial services industry. This is because customers are often tempted to switch to a different financial institution that offers a better deal and switching is becoming increasingly easy.

• Skills: From what we can see at WiRD Associates the skills gap is still a major challenge for financial services organisations.
• Security: From our point of view security is a major concern for financial services organisations. These organisations hold a lot of sensitive customer data, and they need to ensure that this data is protected from cyberattacks, which in itself is costly. Furthermore, these cyberattacks are becoming increasingly sophisticated and hence difficult to prevent.

• Compliance and regulatory challenges: From our perspective the financial services industry is one of the most heavily regulated industries in the world. This can make it difficult for financial institutions to keep up with the latest regulations, and can also lead to increased costs.
• Lack of trust: From our experience it has become evident in recent years that there has been a decline in trust in the financial services industry. This is due to a number of factors, including the financial crisis of 2008 and the recent scandals involving banks and other financial institutions.
• Customer expectations: From our experience it is clear that enhanced customer experience is increasingly a significant differentiator. Customers are demanding more from their financial institutions. They want products and services that are easy to use, convenient, and personalised.

From our perspective it is very important to have a sound understanding of the pain points in the financial services industry as well as how the dynamics of these pain points influence marketing strategy before developing your market development plan. We have found that without this deep understanding of the industry our marketing plan does not stay on point for very long and results from our marketing plan become somewhat of a hit and miss affair. 

What is your experience in this regard? How important is a deep understanding of the pain points in the Financial Services Industry to your business development plan? Please share your experiences with WiRD and each other by commenting or interacting on LinkedIn