3 Trends in Financial Services that Product Managers Must Tackle by Upskilling
Download the Brief: Industry Trends in Financial Services with Product Management Transformation.
Digital transformation initiatives heated up in organizations across multiple industries during the pandemic — and the momentum continues. According to Flexera, 54% of companies worldwide are prioritizing digital transformation, and Grandview Research projects the global digital transformation market size will reach $400.34 billion in 2021.
In the financial services industry, transformation is imperative, not only for optimizing costs and improving efficiency, but for maintaining competitive advantage. Paperless and mobile banking, touchless payments, the proliferation and increasing popularity of cash apps, and data-driven fraud prevention are all capabilities that hinge on the ability to digitally transform and adopt innovative technologies. McKinsey/Finalta found that banks are generating 65% of sales through digital channels in 2019, up from 36% only three years earlier.
It’s no wonder, then, that 97% of financial services firms have begun their digital transformation journey. As such, they’re making significant investments in digital processes and technologies. BDO research found that 65% plan to increase spending by 10% or more to support their top three long-term goals: improving customer experience, increasing operational efficiency, and introducing new products and services. A vast majority — 83% — say improving the customer experience is their top priority. And, nearly a fifth (17%) say investing in innovative digital capabilities such as blockchain, AI, and IoT for anticipated business needs is top of mind.
Key Areas for Digital Skills Development
To both enable and support digital transformation, Product Managers in the financial services industry must up-level their skills and adopt modern practices such as Continuous Discovery, Agile Development, and Digital Product Management. As they do so, they will be better equipped to contribute in meaningful ways to their organizations as digital transformation takes hold.
In a recent brief, 280 Group examined trends that are impacting the finance industry, and how their product management teams can capitalize on those trends by adopting modern PM practices, optimizing skill sets, and aligning product and development processes.
Let’s discuss three important trends that upskilling can help Product Managers at FSPs navigate in 2021 and beyond.
#1: Data-Driven Innovation
According to Nielsen, more than half of product innovations fail to deliver on customer needs and 80-85% don’t meet business expectations. The good news is that FSPs have more data — and access to it — than ever.
Data from mobile apps, social media, telematics, and AI-powered apps and services (see below) enable advanced analytics and informed decision-making about how to build and price new products and services. This data allows Product Managers to understand how customers use (and don’t use) their product, the issues and challenges they encounter, and the feedback and concerns they raise. The ability to leverage this data effectively has huge implications for product innovation, and an organization’s ability to deliver products and services that delight customers.
To that end, Product Managers will need to re-skill with a focus on digital and learn how to incorporate real-time data gathering and analysis into their product strategies and planning processes. They must learn Continuous Discovery techniques that support experimentation and optimization to measure and adjust rapidly to better serve their customers. Those skills will help facilitate rapid development of innovative digital products and services that meet changing customer needs and expectations.
#2: Customer Experience and Competitive Differentiation
To retain customers and grow market share, financial services organizations must deliver exceptional and seamless mobile, digital, and in-person experiences. Today, more than 50% of U.S. consumers use mobile banking apps, and 80% of them use mobile as their primary banking channel. Customers expect to be able to open an account, apply for a mortgage or loan, or get personalized insights about their credit and financial health in minutes. And it’s beneficial for FSPs, too. Direct-to-customer channels such as social media and e-mail help cut costs, accelerate conversion, and reduce customer friction.
Product Managers must become adept at new research methods and data analysis, so they can determine and understand customer behaviors and preferences, and build products and services that deliver on customer expectations. They must also be able to leverage digital Voice of the Customer (VoC) techniques and qualitative data to inform product strategy and decisions, to better provide personalized experiences that inspire customer loyalty and advocacy.
Learning iterative customer-led methodologies for product development will be essential as Product Managers look to prepare themselves and their teams to build products that matter in the increasingly competitive financial services marketplace.
#3: AI-Powered Tools and Services
As part of the effort to achieve competitive advantage, financial services organizations must adopt AI-powered tools and technologies. AI is being used in the financial services industries in a number of ways, such as automated risk assessment and loan eligibility scoring, and highly personalized services through chatbots and self-help capabilities. As the risk of money laundering, transaction fraud, account takeovers, and other attacks increases, AI will be essential for preventing fraud losses.
AI can lead to back-office efficiencies, as well. For example, it can help to rapidly and accurately assess risk, and significantly reduce time spent processing and approving loan applications. According to research from Intertrust, 65% of senior financial management expects positive changes from the use of AI in financial services, yet only 33% indicate these technologies are being deployed today.
Taking advantage of these new AI-powered technologies to create game-changing products and tools will not only require Product Managers to be highly skilled in understanding and applying real-time data; they must also have the ability to align teams across various business units within an organization around goals and strategies for leveraging AI in all facets of their business.
Capitalize on Digital Transformation
Today’s Product Managers can’t sit idle. The velocity at which digital transformation is ushering in new capabilities, tools, technologies, and services means you must be armed and ready with the right skillset and knowledge to act quickly, and capitalize on market demand for digital products. At 280 Group, we specialize in getting you up to speed quickly and ensuring your skillset is robust enough to tackle the challenges of innovating at the speed of digital.
Check out our latest report, Industry Trends in Financial Services with Product Management Transformation, to learn more about the trends impacting FSPs today. For more information about how 280 Group can assist in upskilling your product management team with private and customized training, contact us today.