- Written by Jessica Houston
In all areas of financial services, sales and distribution teams are facing enormous challenges in achieving sales targets, these challenges now include regulatory as bonuses based on sales volumes are effectively banned, as are commissions on leveraged funds. Consequently, organisations are re-visiting their revenue and remuneration models.
Channel conflict, along with dis-intermediation, are significant issues for the financial services industry. The major banks with so many distribution channels, e.g. branch, mobile agents, financial planners, 3rd parties, internet, call centre, telephone banking (Interactive Voice Recognition and Natural Language Speech Recognition) and mobile phone banking are finding their sales force bumping into each other as they seek to meet their Key Performance Indicators (KPIs). At the same time the customer wants to be able to switch between channels without any conflict or loss of data. They expect the financial institution to be able to respond without having to repeat their story.
Chairmont has worked on a number of assignments in the mortgage area where the ability for customers to switch channels has been achieved by creating technological solutions that mean historical data has been reused and where necessary new data added. In the Home loan area customers wishing to “Top Up” their loans are able to do so without any trouble and importantly the funds are available on the same day.
Complementing this has been the growth in call centre tele-marketing and sales of financial products as institutions use business analytics to more effectively target their existing customers, whether dormant or active, through “predictive” behavioural tools. Big Data is increasingly being obtained through the various customer touch points of financial services institutions. This is being extended to potential clients through buying lists. In conducting this work financial institutions are very aware of their Privacy obligations. Please refer to Diagnostics for an example of Chairmont’s work in the areas of Big Data and Touch-Point Analysis.
With the convergence of investment and lending activities, their respective regulatory compliance requirements and the increasing use of business analytics, the skill level required to sell the many products available in the market is increasing. This has implications for the Customer Representative role and their position as Subject Matter Experts (SMEs). Product complexity and the number of products available is increasing, although in reality there is little difference between most products within a product family, e.g. home loans are generally homogeneous, as are Cash Management Accounts, or Term Deposits. Their common characteristic being that they are price driven. While products in a product family are the same, clients still expect the adviser/sales person to be able to provide a comprehensive understanding of each product. As the role of the Customer Representative becomes more challenging organisations are seeking to increase their SMEs in the required fields with the necessary education and licensing authorities, e.g. mortgage lender, financial planner or risk (insurance) expert. Customer Representatives that are able to traverse investment, lending and risk activities will become the norm in the coming years, i.e. SMEs in multiple products and markets.
With the increased level of licensing of brokers and financial advisers, higher educational levels are necessary for new entrants. So in time as the “old” style of broker/adviser/employee that has relied on commissions and the “mates” approach, leaves the financial services industry, there will be a “new’ style of distribution reflecting the different skills and educational requirements.