RSS FeedBy M. Isi Eromosele
In order to formulate an effective and profitable convergence strategy, global financial services companies should undertake seven key steps:
Complete A Self Diagnosis and Choose Target Segments
Financial institutions need to start with a thorough understanding of their existing customers, markets and capabilities as well as a strong sense of what role non-traditional products will play across the organization.
- What is the financial institution’s overall strategic direction?
- Can the company achieve its corporate objectives with its current strategies?
- What resources are available or would need to be developed to expand its product and services lines?
- What is the mix of the customer base it currently has?
Analyzing the financial institution’s customer mix and assessing assumptions about which segments, whether mass market or affluent it would target can determine which markets represent the largest opportunity.
- Does the financial institution have any unique capabilities to leverage?
- Does it have a large branch network?
- What are potential economies of scale?
Understand Customer Needs and Dissatisfaction By Segment
The mass market represents a very attractive target market for mid-market banks, provided they can deliver easy-to-understand solutions and products with greater convenience. Feeling neglected by major financial providers, this segment presents a considerable untapped market.
While mass market customers are generally satisfied with their financial providers, a majority of them feel they need better advice and guidance. Banks can capture a larger share of investment services revenue through innovative bundling, starter investor accounts, special purpose products and provision of low-cost, basic investment advice through the Internet. The needs of the affluent market require an assortment of personalized investment products and services. The affluent in emerging economies represent a particularly attractive market segment.
Create Innovative Product and Services
Financial institutions can target the mass market through a focus on simplifying both products and the transaction process. While financial institutions have historically created products and services within strict product line definitions, consumers have tended to view the market through a needs-based perspective.
Innovative products could include:
- Mutual funds starter accounts
- Grouped family starter accounts
- Guaranteed long-term tuition savings accounts
Develop An Appropriate Brand Strategy
Today, many financial services institutions still connect their brands with functionality and not with an overall customer experience as a goal. Many customers view their financial institutions as a place to conduct trustworthy transactions but not as a partner in managing and advancing their financial well being. This perception needs to be changed.
Affluent customers demand access to the broadest possible range of global investment products and services. As such, financial institutions need global financial planning sophistication to serve these customers, which require considerable investment in developing in-house capability or co-branding with other institutions.
M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance
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