Financial services firms ‘to invest in digital’

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British financial services firms are enjoying improved performances as the macro-economic outlook continues to recover following a difficult few years, with plans to invest much of their new income into their digital and technology sectors.

For a number of reasons, banks and other large financial institutions are often somewhat behind the competition when it comes to bringing their marketing processes up to date.

Traditionally, some of the most popular and expansive organisations were able to rely on their brand to attract customers, meaning their approach to advertising tended to be somewhat staid.

However, the emergence of alternative finance providers and the reputational damage caused by recent scandals means they are planning to improve their performance in this area. This means bringing in new staff, but it will also see a major investment in technology such as CRM software.

According to the latest survey from PwC and the Confederation of British Industry (CBI), IT is the biggest area for the coming 12 months when it comes to investment intentions.

PwC financial services leader Kevin Burrowes said one of the factors behind this shift is a drive to improve interaction with customers. He cited recent research from his organisation highlighting the fact that less than half of people are loyal to their current bank as a reason why financial services providers are changing their approach.

“Banks need to adopt bold new strategies as they face challenges around regaining trust, legacy issues, regulation and technology.

“Digital must be at the heart of their business as new entrants such as challenger banks, peer-to-peer lending and crowdfunding all have one thing in common – digital platforms which make the most out of big data and really focus on customer needs,” concluded Mr Burrowes.

Financial services companies are also planning to increase their spend on marketing in 2014, with 42 per cent of respondents describing this as a priority.