The growing popularity of smart phones is changing the way consumers prefer to communicate with the financial services sector, according to a new study from Telus and IDC Canada.
The study, called The Future Consumer, looks into shifting communications expectations of Canadian consumers and the role technology plays in their growing demand for service.
As laptop ownership has moved into the mainstream (overall ownership reached 49% in 2009, according to the report), smart phones are moving stealthily in popularity and are having an impact on how consumers are interacting with one another and their service providers.
Ownership levels of smart phones have risen to 14% in 2009, from 8% in 2007, when an earlier version of the white paper was published, according to the data. More importantly, the desire to own a smart phone has risen among the younger population: 55% of those aged 13 to 17 want one, so do 40% of 18- to 24-year-olds.
The changing technology has allowed consumers to surf the internet on their morning commutes, access email from the airport and run applications such as stock-trading platforms while in a hotel room halfway around the world.
“Sooner or later, the financial institutions will start looking at these communication tools and start incorporating them into their IT practices,” says Ismail Pishori, vice-president of vertical marketing at Telus.
Pishori pointed out that almost everyone now is using email to communicate, at least at the basic level across all ages. The younger age groups are choosing to use email last, as they opt for instant messaging or text messaging. Meanwhile, the older age group tends to lean toward email first. “What’s interesting to realize here is the asynchronous nature of these communication methods,” he says.
However, age is no longer the predictor of interaction behaviour between a customer and the financial services sector, according to the research. The notion that someone in his 70s is not a technology-savvy individual is a mistake for a financial institution to make, says Pishori. “Age is no longer an indicator of how one behaves.”
The ability of service-driven institutions to use multiple means of communicating is putting greater pressure on financial institutions to provide similar service.
What this means for client relations
In the case of advisors, the flexibility and ability to use multiple mediums to communicate with the client base, whether through a servicing cycle or through a selling cycle, are important in their communication, says Pishori. He noted that the time is now for advisors to start thinking about communication, not only for their current customer base but also in terms of where they are going to get the next customer.
Dr. Robert Kerton, professor of consumer economics at the University of Waterloo and a consumer issues expert, pointed out that a growing number of consumers want open communication with organizations. While consumers have access to newer technology, there’s a growing importance for the financial institutions to meeting those communication styles.
The research revealed that about 60% of respondents are consumers who want new forms of communication with their financial services providers. Only 37% responded as “not interested.”
The relationship between financial institutions and their customers has become more difficult in the last decade due to a large portion of customers requiring asynchronous services and a significant portion of customers, 48% according to the data, preferring traditional methods of face-to-face interaction.
“For the financial services sector, service quality is a race between expectation: what you think the institution should do and what they actually deliver technologically,” says Kerton.
In the evolving marketplace, the majority of future customers fall into four categories, according to the research. Urban Established, who make up 21% of the communication spectrum, will have an impact on the customer and service provider interaction. Integrated Users, who make up 10%, are likely to use more tools but expect continuous dialogue. While On the Move (9%) and Social Networkers (12%) are two groups that adopt new methods of communication.
Kerton pointed out two key groups, On the Move and Integrated Users, as the ones to watch for future technology and communication trends.
However, when it comes to complaints, a different group comes to the forefront: the Social Networkers.
“They are the ones who can flame you. They are live and online. I would pay close attention if I were a financial institution to that sub-sector just to make sure that my complaint-handling method is a complete success at retaining a customer who, let’s say, was insulted,” says Kerton.
The next 10 years will be crucial for financial institutions to provide positive consumer experience, as there will be a growing need to balance services between the tech-savvy and the traditional consumer, according to the data.