14 Feb 2014 3 digital learnings from the world of the direct-to-consumer investment market
Digital empowers consumers.
Take any industry, any set of products, any consumer group, and it is hard to miss the impact digital technologies are making in giving ‘power to the people’. Social media has given consumers a voice; digital innovators are increasing competition; digital platforms are opening services up to new consumer groups.
Historically, financial services is one industry that has been sheltered from disruption on the scale seen elsewhere – such as the music publishing industry. There are now increasing signs that this is on the cusp of change. One is the emergence of new digitally enabled disruptors, such as Nutmeg, whose CEO we interviewed last year. Another is the rise of the so called ‘DIY investor’ – individuals empowered with digital platforms that are side stepping traditional channels and taking control of their own investment solutions.
Last week, FreshMinds’ Helen Trim spoke at the launch of Platforum’s “The Direct Platform Guide”. The event was attended by a spectrum of industry professionals seeking to serve this growing segment of investors. There were a number of learnings from the day that apply to any financial services firm, and in fact any company, facing a new wave of digitally empowered consumers, here are just three:
‘Self-serve’ is never an excuse for ‘poor-serve’
Digital has opened the door to self-service in an unprecedented way. In the D2C investment market platforms are enabling investors to research funds, invest, monitor performance – all from the comfort of their sofa. However, in no way does this mean that providers can relax on customer service.
As highlighted by Jason Hollands from BestInvest, the term ‘DIY Investor’ is in some sense misleading. Yes, some hobbyist investors might be able to navigate the world of investment unaided, but most are more likely to be ‘flat-pack investors’ – those that are keen to self-serve, but with the step by step assembly instructions to hand. For these consumers, excellent digital tools must be matched with equally excellent service – including the ability to interact with another human being (be it by phone, by webchat, or by video call).
No matter the industry, digital must not be viewed as merely a means of reducing costs and making serving consumers easier – it must be seen as a means to enhance, enrich, and empower customer experiences. The real prize will be for providers who can not only deliver compelling digital solutions, but are also able to be there for the consumer when they need it.
Price grabs headlines, but not all consumers
As with many financial service products, when it comes to comparing D2C investment platforms, industry press are fixated with price comparison tables. As Platforum rightly highlighted, the impact of price should never be disregarded, but it is not always the main thing. The fact is that one column of a price comparison table is unlikely to ever give a true view of what such services cost.
The truth is that most time-poor consumers in a fast-paced digital world are increasingly likely to look beyond the numbers to other factors. Platforum underlined two such factors such as ‘convenience’ and ‘aggregation’. No matter the industry, digital is increasingly pushing businesses to not only deliver value-for-money, but also simplicity and ease. Underestimate the importance of these at your peril.
Forget D2C, focus on H2H
In years past, individual personal contact was the home of most commercial interactions. Be it face-to-face, by phone or even by post – at some level businesses were forced to face up to and deal with consumers one to one. With the advent of digital platforms many of these interactions has been superseded. This leads to an increased risk that digital players forget they are dealing with individual people. As FreshMinds’ Helen Trim highlighted: “we need to stop talking about D2C and start talking about H2H – Human to Human.” We must seek out ways to remain close to our customers and partner with them as individuals, to understand their individual needs and to support them in reaching their individual goals.