EY’s 2016 Global Consumer Banking Survey has some important findings for banks in relation to financial advice. The survey of 55,000 bank customers found that unless banks change the way they deal with their customers they will find it difficult to remain dominant players in the financial advice industry.
Whilst the vast majority (93%) of customers surveyed by EY said that they trust banks to look after their money, many do not trust banks to give unbiased financial advice. Furthermore, in addition to cultivating more trust, banks need to find engaging, more convenient and lower cost ways of delivering advice to their customers.
The EY report asks the question “How can banks serve and engage with customers in a way that is relevant to them?” and then includes as an answer “…Improve personalization and targeting capabilities, with a particular focus on digital advice and the role of branches”. The report also notes that 16% of those surveyed where sufficiently financially literate and digitally savvy to rely solely on digital tools to meet their financial needs. The majority of customers, however, tend to use digital channels first, followed by personal contact for completion of a product purchase.
The message here is clear. Digital engagement is increasingly important and banks, and all other financial advice groups, need to offer a strong digital presence with tools that are engaging and valued by customers. For example, in relation to financial projections and asset allocation, a powerful combination is for an online application that provides enough information to engage the customer and then can also used by the financial adviser, perhaps with additional functionality, when the customer seeks a more personal interaction. This approach empowers the customer and provides a more seamless experience from first engagement through to statement of advice.