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Legacy systems are preventing banks from using technologies which could help deliver a customised consumer experience.
Research from Pegasystems and Cognizant found a quarter of financial services retailers, such as banks and insurers, have no plans to offer a fully personalised experience to customers. Most blamed legacy systems for the slow uptake of technology needed to interpret customer data.
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“We live in an age where ‘generation selfie’ is king. The expectations of customers are increasingly influenced by the experiences they get from digital leaders such as Amazon and Netflix,” said Graham Lloyd, director and industry principal of financial services at Pegasystems.
“It’s critical that those in the financial services sector invest in technology that enables them to mine the rich seams of available data. This can help them truly recognise their customers as individuals and personalise their customer journeys accordingly. Those that don’t could find themselves falling a long way behind.”
The internet-enabled population are more informed about financial choices and can save money by shopping around for a service.
Banks have to adapt to the digital-savvy generation who are more likely to use digital technologies to interact with banks or insurers.
Connected devices and the data collected through them are making it easier to personalise services for customers. The research found a majority of financial services retailers have plans to utilise data collected about customers to build customer profiles.
Some 68% of financial services retailers plan to use data from wearable devices to provide a personalised service by 2021, while 22% stated they would use data from connected cars in the next two years.
Around 40% financial services organisations believe they will be using data from devices to predict the needs of individual customers.
However, 79% stated having a lack of a single customer view was acting as a barrier to offering personalisation. Many said that processing very large data sets is too difficult, with 88% claiming their current legacy systems are unable to connect to data provided by connected devices.
Banks are not the only organisations held back by monolithic legacy systems.
A majority of businesses have back-end systems – such as business intelligence and analytics systems, customer databases and workflow and document management systems – which need to be replaced or updated to properly harness digital technologies.