Actual size_PNG-Enterprise illustration.png
Financial services

Digital transformation in financial services: This is where banking, insurance, and wealth management are heading

  • bijon mehta
    Bijon Mehta
  • Sep 17, 2020

Twilio's financial services expert Bijon Mehta shares insight into the future of digital engagement in the financial services sector, and what that means for banking, insurance, and wealth management now and into the future.

Adjust text size

Get our newest eguide, Establishing Consumer Trust in a Digital Financial Services Ecosystem.

Fintech and Big Tech have had a profound impact on the financial services industry, and the disruption shows no signs of slowing down.

Customers expect their banking, wealth management, and insurance experiences to be as intuitive and seamless as their favorite apps and online shopping experiences. This new standard requires technology that is seamless, frictionless, and practically invisible.

Read more: Unpacking analysts advice for financial services amid COVID-19.

COVID-19 has made digital channels, products, and services a must-have—not only to serve existing customers, but to attract new clients and grow. In a survey of 2,500 enterprise decision-makers, we found that 95 percent of financial services respondents agree the coronavirus hastened their organization's digital communication transformation effort—and by an average of nearly six years.

The organizations that survive and thrive will use this moment to rethink their business model, product, and service offerings. Most importantly, future success will rest on how they engage with their customers.

Here’s deeper insight into how banking, wealth management, and insurance are facing the new normal of financial services:

Banking as an omnichannel experience

Between December 2019 and April 2020, branch closures led to call volume spikes and massive wait times. Lagging digital capabilities, as well as poorly designed or missing digital features, forced more customers to call their bank. Pre-COVID-19 Finalta research indicates a four-fold higher global rate of inbound calls per active customer (1.6 vs. 6.4) for banks with underdeveloped digital journeys.

Before COVID-19, customers were already turning to digital channels with increased frequency; the pandemic put unprecedented demand on them. The challenge is not only improving digital service journeys, but also to minimizing agent time spent on low-value activities.

Given the lack of one-to-one access and the fact that many bank employees are still working from home, banks are rethinking how they communicate with both their own employees and their customers. In this evolving normal, real-time communication channels such as SMS/text, as well as alerts and notifications, play an even more critical role in maintaining customer relationships.

Dig deeper: Get data on business impact from companies using SMS/text for proactive alerts and notifications.

Banks can also integrate application programming interfaces (APIs) within their existing web portals and mobile applications to empower their employees to interact with their clients over their preferred channels. It’s now possible for relationship bankers and branch employees to engage via compliant, secure video as well.

As more “traditional” banks develop their digital engagement strategies and solutions, banking will continue its shift toward a true omnichannel experience, where customers are served over the channels of their choice from front- to back-end, including contact centers.

Insurance without the headache

The fundamental underpinnings of the insurance industry are under threat.

While the third-party broker model continues to thrive, fintechs or insurtech, to be specific, are finding ways to upend this distributional ecosystem and provide a more flexible, transparent, and direct-to-customer offering.

Traditional insurance companies are rethinking customer engagement and processes. Rather than just interacting with clients when there is an annual renewal or a claim, insurance companies are increasingly looking to create conversations and learn from the data that they collect. This requires digital communication.

In particular, insurance agents are turning to SMS and video capabilities via the contact center to increase support channels and nurture customer relationships as customer demand increases.

See the data: Survey reveals how financial services plan to adapt their customer engagement strategies post-COVID-19.

Insurance companies are evolving to offer customers a more engaging CX and UI, enabling them to leverage their mobile app to report a notice-of-first-loss (NoL) and track the claim—all while integrated into the contact center environment, where agents can see the full recorded history of the NoL and the customer’s key information. This unified experience removes a lot of the friction from the process, resolving the claim faster for a better customer experience.

Online wealth management that’s safe

More than half (53 percent) of wealth management firms report that clients are demanding an increase in digital engagement.

Wealth advisors now need to function using as many digital channels as possible—SMS (including OTP), voice, and video. The challenge is to deliver this in a compliant and integrated manner.

Even processes like client onboarding are moving toward a fully digitized state. Thankfully, the technology now exists, and many fintechs have led the charge in offering a complete digital, mobile experience.

Learn more: 10 steps financial services firms can take to modernize, adapt, and grow from COVID-19.

For wealth management in particular, catering to high net-worth individuals, digital transformation and security go hand in hand. Many authentication providers offer multiple factor types (two-factor authentication) to validate a user's identity. And ideally, your authentication provider will allow you to enable multiple factor types for a single user, with some factors as required and some as optional.

A popular alternative to authentication via SMS are authenticator mobile apps, but for the greatest flexibility and customization, we recommend verification software development kits (SDKs) for all financial services organizations.

Building the new normal of financial services

Financial services need to reimagine the customer experience, catering to the increased demand for digital services and experiences.

From onboarding, engagement, through to service, customers are seeking quick support and instant access from their banks, wealth advisors, and insurance providers alike.

In the current environment and foreseeable future, customers are increasingly demanding contactless services that give them power and control without requiring face-to-face interactions, branches, and office meetings. New digital services will form the backbone of customer relationships, increasingly driven via mobile communications. This new engagement model is an opportunity to turn one-off interactions into meaningful conversations and lasting relationships.

Learn more about how financial services can earn consumers’ trust during these uncertain times and beyond in our eguide, Establishing Consumer Trust in a Digital Financial Services Ecosystem.


Get our eguide, Establishing Consumer Trust in a Digital Financial Services Ecosystem.

Learn More
I want to see more about: 
  • Editions
  • Industry
  • Product
  • Region
  • Solution
  • Use case
Communication for good | Spring 2021
  • Communication for good | Spring 2021
  • COVID-19 and the new normal | Winter 2020
  • Digital trust | Summer 2021
  • Pre-SIGNAL special | Fall 2021
  • Retail in 2021 | Summer 2021
Let's go
bijon mehta

Bijon Mehta

Bijon is the Global Head of Financial Services at Twilio. His industry expertise spans his 25 years of experience in financial technology, capital markets, corporate innovation, and digital product development.

Actual size_PNG-Operations illustration.png

Adopting a challenger (bank) mindset

Much has been made of "challenger banks" and strides in digital innovation, and with good reason. These financial services sector disruptors continue to grow in accounts, numbers, and influence. All financial institutions, however, can seize the chance to update aging technology, evolve customer experience strategy, and adopt a "challenger" mindset.

Bijon Mehta