Around two years ago Salesforce decided to pivot its approach by focusing resources on six vertical market industries. Naturally one of these was financial services.
Rohit Mahna is the head of financial services at Salesforce. He says Salesforce industries is all about go to market in financial services, health, retail, manufacturing and others.
"We saw a need across all major industries for them to pivot to be closer to the end customer. When we did the assessment in financial services it was clear that there was so much opportunity," he says.
The company identified the asset classes it wanted to sell into. Retail and corporate banking, wealth management and the insurance market were key areas of focus. In the insurance market the target was different insurance types including property, general and life.
A common theme in the banks was the post crisis end customer’s lack of trust and loyalty. For example in banking, research showed customers would far rather work with a technology company than engage with their bank. In insurance, 70% of policy holders were reporting that they didn’t get a great service.
Barclays is marquee account for Salesforce. In Barclays the approach was to start with strategies for retail and corporate banking and wealth management.
"Our value proposition to any financial services firm is to get closer to customers with a connected experience across all engagements whether that is coming into a branch, online or mobile. And also by internally making connections between the bank, the partners and the intermediaries. The real opportunity for the bank was to think of the end customer. Behavioural change was needed. Customer expectation has been reset around building experiences."
The traditional set up was about moving from working as silos of business. That part can quickly change and find commonality, says Mr Mahna, but what the customer wants and what is difficult to get is for the bank to get a 360o or even 270o view of the customer.
The context for the banks included the emergence of the digital disruptors which put an unprecedented level of pressure on the traditional financial services players. This means rethinking client engagement to move on from a traditional relationship model and the traditional marketing approach. Read: Who is winning in the banking tech reace – challengers or traditional banks?
"I always take it back to customer demand. Customers want different engagement. Hence the rise of the challenger banks and the technology driven competitors from outside the traditional financial services industry. The big banks are realising they have to make change now."
Banks have incredible systems of record but those systems were built for input. What Salesforce has built is system of engagement to make front line data to hand. The objective is to help banks be less reactive and to get in front of the customer.
"The way we do that is through the multi-cloud delivery model, run on our platform that is API enabled to connect their core system to our system of engagement," says Mahna.
Another change is the attitude to cloud adoption within financial services. Cloud is more acceptable to big banks. Familiarisation has made them more cloud comfortable.
Rise of Fintech
In 2010 the global spend on fintech was roughly $1.8bn. In 2015 it reached around $19bn.
Mahna says 70% of that is invested in front office experience because that’s where there is the most friction. We (customers) want a digital experience and different model is needed.
"Speaking with banks around the world I’ve seen them say ‘we really need to embrace a digital strategy.’
Risk
Traditionally a bank was only interested in capital risk. This is now changing. When it comes to customer engagement banks are interested in reputational risk: What’s the risk of the customer not being satisfied.
Because of that technology risk becomes very important, you want to make sure tech is connected to delivering what the customer wants.
"I see a collective agreement that future financial services is going to be about an ecosystem, which maybe involves a traditional bank, maybe new entrants and those with other capabilities."
Salesforce likes building clouds and two months ago it launched FS cloud.
"When we launched, we did so 20 connecters into the Salesforce customer success platform and its other cloud. The real power is when we speak with CIOs and bring cloud CRM and the larger Salesforce ecosystem into play."
