The banking, financial services, and insurance (BFSI) industry has undergone a dramatic transformation with time. For instance, let’s talk about customer service. In the early days, banking and insurance companies solely conducted businesses in brick-and-mortar branches and their customer service was limited to face-to-face interactions between employees and customers.
After the invention and mass commercialization of the first telephone model, banks, financial, and insurance companies provided customer service via phone. Customers who wanted some assistance from their respective BFSI companies would simply dial the customer care number and they would get to speak with a representative and get their issues resolved.
But in the era of internet and mobile banking, where a vast majority of customers prefer managing their bank accounts using a computer or a mobile app, companies in the BFSI sector need to level up their customer service game. For that, they need to know what’s currently happening in the customer service front and what the trends are.
In this blog post, we have discussed the future of customer service in the BFSI sector. If you are a professional in the dynamic and ever evolving industry, then this blog post is just for you. Read on and thank us later.
Future Trends of Customer Service in Banking, Financial Services, and Insurance
The BFSI sector is poised to adopt many emerging technologies and methodologies to transform its customer service and meet customers’ expectations in the best possible manner. Here are some trends in the BFSI sector.
1. Growing Usage of IP-Based Phone Systems
IP-based phone systems are communication systems that run on Voice over Internet Protocol (VoIP). Launched in the 1990s, VoIP-based phone systems became popular in the 2010s and adopted by all sizes and types of companies across industries. By using IP-based phone systems, banks, financial institutions, and insurance companies can reduce their communication costs by 50-90 percent. Another advantage of IP-based phone systems is that they can be cloud based. That means banks, financial institutions, and insurers don’t have to buy specialized hardware, pay installation and maintenance fees, or hire and maintain an IT team.
On one side we have many banks, financial service companies, and insurance firms that are already leveraging single-tenant IP PBX software to handle a wide range of day-to-day operations. While on the other side, we have BFSI-centric Business Process Outsourcing (BPO) companies using multi-tenant IP PBX software for better privacy, client data segregation, centralized management, customized call routing, and more.
2. Focus on Omnichannel Experience
Today, a majority of people use smartphones. Many of them would prefer communicating via social media, live chats, instant messaging apps, and emails over making voice calls. That is why providing omnichannel experience is extremely crucial for banks, financial institutions, and insurance companies.
Many organizations in the BFSI sector are already using sophisticated omnichannel contact center software solutions and many more are going to follow suit. As per a report by SkyQuest Technology, the market size of BFSI contact center is projected to grow at a compound annual growth rate of 20.4 percent from USD 1.88 billion in 2023 to USD 8.29 billion by 2031.
3. Use of AI to Deliver Personalized Interactions
Many companies in the BFSI sector are already using artificial intelligence (AI) tools and solutions and many more are going to follow suit. As per a survey, eight out of every ten banks that took part in the survey said that they recognize AI’s potential to enhance the personalization of customer service.
As per a data published by International Data Corp (IDC), the total spending on AI was projected to reach USD 166 billion in 2023 all over the world. The BFSI sector is named as one of the largest contributors by industry. A survey conducted by Temenos and Economist Intelligence Unit on AI revealed that 85 percent of IT executives have a clear strategy for adopting AI in the development of new products and services.
4. Enhancing Customer Service Using Big Data
The use of big data in the BFSI industry is growing at a rapid pace. According to Mordor Intelligence’s industry report, the market size of big data analytics in banking is projected to grow at a compounded annual growth rate (CAGR) of 23.11 percent, from USD 8.58 million in 2024 to USD 24.28 million by 2029.
By using big data, banks, financial services, and insurance firms can understand customer needs in a much more efficient manner and provide tailored solutions. So, it’s no surprise that they will use big data not only to enhance products but also customer service.
5. Automation of Manual Activities
A McKinsey study revealed that the insurance industry can automate over one-third of claims processing and underwriting tasks. The same study also revealed that up to a quarter of banking processes are expected to be automated in the next few years.
A recent research conducted by Autonomous Next also projected that banks and financial institutions may save a total of USD 447 billion by using AI-based technologies and applications. When banks, financial service companies, and insurers are able to automate their respective organization’s communication process, they can provide superior customer service.
6. Real-Time Customer Service
When customers call any bank, financial institution, or insurance company, they expect immediate response. A recent study revealed that seven out of every ten customers expect a response within five minutes when they contact a bank, financial service company, or insurance firm through chat and two-thirds of them expect the same response time when they contact via email.
Real-time customer service can be a major differentiator for organizations in the BFSI sector. This is the area where many banks, financial companies, and insurance firms would like to beat their competitors. That’s why companies in the BFSI industry will invest more on tools and applications to increase their response rate and decrease average on-hold time.
7. Increased Focus on Security
Would you be surprised to know that the BFSI sector experiences much higher cyberattacks than any other industry? As per various reports, the number of successful attacks and data breaches in the BFSI sector is increasing every year. As per American Banking Association’s findings over 60 percent of international financial institutions with a minimum asset worth USD 5 billion faced cyberattacks over the past year.
As per a report published by Sophos News, ransomware attacks on the BFSI sector have increased from 55 percent in 2022 to 64 percent in 2023. That’s why it’s not surprising to know that more and more BFSI companies will increase spending to bolster their data security and cybersecurity. As per a report by The Business Research Company, the global BFSI security market size is projected to grow at a compound annual growth rate of 11.7 percent. As per a PwC study, out of all industries’ cyber security expenditure in the Indian market, BFSI ranks the highest with a 26 percent share.
Taking Everything Into Consideration
The BFSI sector has always been at the forefront in providing high quality and effective customer service. From face-to-face interactions with customers to receiving handwritten letters to delivering customer service over phone calls, the BFSI sector did it all.
Now, with the rapid change in digital technology, the BFSI sector is ready to transform its customer service by leveraging advanced technologies and methods. That involves leveraging VoIP-based telephony systems, providing omnichannel experience, automating customer service with the use of AI, ML, and big data, and more. Visit vyvymanga for more topics.
