The 1950s in America was the era of the booming economy. The GDP was growing, inflation was declining, and unemployment was low. The average American family had twice as much real income to spend as the average family of the 1920s. To spend it wisely, many customers looked to their financial advisors and bankers for advice and guidance. These service providers built a relationship that went beyond the individual meeting with customers; the bond with a financial advisor was regarded as loyal, essential, and personal.
Then came the deregulation of the 1980s. As a result, many financial institutions failed, and the role of the financial advisor and banker changed. The motivation behind this profession shifted in many cases to be self-focused, with each service provider concentrating on improving productivity and income, increasing their portfolio, and growing overall profits for the company.
As the U.S. experienced several recessions between the 90s and late 2000s, service providers continued to focus on their own employment safety and profitability, afraid to lose their jobs and trying to stay competitive in a challenging, unpredictable market.
These changes caused a shift on the customers’ end as well. Most no longer considered their banker or advisor a confidant, in some cases even suspecting their advice and guidance. The rise in technology like the internet and the usage of social media allowed customers to educate themselves, no longer looking solely to their financial advisor for knowledge.
As we hopefully see the end of the COVID-19 pandemic, we are experiencing a return-to-analog sentiment across industries—and very evidently in the financial services industry. Instability of income, fear of losing employment, and the shock to “normal” life caused customers to look for the safety and security financial institutions once provided.
Financial services providers should understand that shift. They should immerse themselves in the role they once held, which customers so desperately need them to take: confidant.
Customers need to feel they are being taken care of, regardless of the business’s best interest or current market trends. Financial services providers need to inform their customers of the possible ways to ensure a comfortable and affordable life, through savings offerings, product suggestions, and service customization.
Additionally, customers want to be educated on what they should be thinking about going forward, as an individual and a household. For example, if a customer has a college-age child, service should be offered not only to the customer (college savings, diversification of investment, etc.) but also to the child (credit-building card, student checking account, etc.). This will enable the service provider, advisor, and banker to build a strong relationship, reinforce trust, and ultimately increase brand quality, company performance and profitability, and overall customer satisfaction.
Be more than your customers’ financial services provider. Be their confidant. Encompass all the roles customers need now more than ever: Be an expert, provide in-person connection, use formal and informal channels (e.g., social media), and offer services that cross generations and help your customers not just as individuals, but as households.
To learn more about the evolving nature of the relationship with financial services providers, read our latest report Top 10 Trends in Customer Experience: Expanding Scope and Managing Expectations.