Financial firms that want to offer a better digital experience to their clients should look outside the financial services industry, according to Corporate Insight.
The company held a webinar on Thursday outlining findings from its study, “The Innovation Advantage.” Corporate Insight surveyed 1,500 individual investors who were active users of their primary brokerage firm’s website.
“Most of the innovation and most of the interesting things that are happening in terms of digital experience are really happening outside of financial services and it makes sense for firms to be looking that way,” James McGovern, vice president of consulting services for Corporate Insight, said on the webinar.
More than 60% of respondents in Corporate Insight’s study said they wanted access to planning tools from their primary brokerage firm, and 56% said educational materials were important to them. However, less than 30% had gone to their primary brokerage firm to find those tools.
“While there’s clear demand for and interest in goal planning capabilities and education, it appears that investors really aren’t going to their primary firm for these tools,” McGovern said.
One reason for that is because “very few of these tools do a good job of capturing the client’s full financial picture,” McGovern said. Users may have to manually enter information and may be limited in the goals they’re able to set through the tools, which often focus only on retirement. Furthermore, the analysis they provide “tends to be superficial,” he added.
Lack of ongoing tracking to measure how far users are from their goals is another factor that reduces the usefulness of and engagement with goal planning tools.
UP by Jawbone, a fitness tracking app, offers an example advisors can follow to increase engagement, said Corey Limmer, lead author of the report.
Jawbone users get customized tips from their “smart coach,” tailored through machine learning to be even more customized for the user.
Financial firms could track users’ spending behaviors to analyze poor behavior and offer suggestions to improve it. Machine learning is key, Limmer said, and users should be able to “thumbs up or thumbs down each recommendation” to further tailor recommendations.
Jawbone UP, as well as Nike + Running, introduce a gaming aspect, allowing users to compete with their friends. Financial firms could integrate this feature by letting users compare their progress toward goals on a percent basis to other users’ progress.
Limmer said this social element “has great potential if applied to the financial services goal setting experience.”
Firms have to make their offerings more interactive, and especially have to make them available and easy to use on mobile devices, according to McGovern.
“Nearly all financial firms offer a basic library of educational materials,” McGovern said, but few offer the kind of interactive and engaging materials that consumers are looking for.
“We see videos and we see webinars at some firms, but they’re still relatively rare,” McGovern said. “Very few offer what we could describe as a gamified experience or an interactive experience that really engrosses the user.”
Furthermore, static articles don’t encourage repeat visits or ongoing support among users, he said.