In today’s dynamic financial landscape, the emergence of zero-brokerage companies has disrupted the traditional business models of BFSI (Banking, Financial Services, and Insurance) companies. These new-age firms offer commission-free trading, online-only services, and a seamless user experience, attracting a significant portion of the market. To stay competitive, BFSI companies must embrace design thinking and adapt to these changing customer expectations. In this blog, we will explore 7 design-thinking tips to help BFSI companies compete effectively with zero-brokerage companies in the BFSI sector.
1. Understand the Changing Customer Landscape
To compete with zero-brokerage companies, BFSI firms must start by understanding the evolving customer landscape. Today’s customers demand convenience, transparency, and accessibility. It’s essential to recognize that these are the key drivers behind the success of zero-brokerage companies. Understanding your customers’ preferences and pain points is the first step in designing innovative solutions.
Pro Tip: Employ the design-thinking mindset of empathy.
To understand the changing customer landscape, BFSI companies must empathize with their customers and understand their needs, pain points, and aspirations. This can be done through user research methods such as surveys, interviews, and focus groups. Design thinking tools such as empathy mapping and user journey mapping can be used to synthesize the findings and gain deeper insights into the customer experience.
How This Mindset Can Help:
By empathizing with their customers, BFSI companies can better understand their needs, pain points, and aspirations. This information can then be used to develop new products and services that meet the evolving needs of customers and help BFSI companies to stay ahead of the curve.
For example, a BFSI company could use empathy mapping to identify the key pain points that customers experience when opening a persona-based trading account. Empathy mapping is a valuable tool for businesses in the BFSI (banking, financial services, and insurance) sector to understand and address the pain points of their customers, particularly when it comes to opening persona-based trading accounts. By delving into the thoughts, feelings, and motivations of their target audience, BFSI companies can identify common frustrations and challenges faced during the account opening process, such as complex forms, lengthy verification procedures, and a lack of personalized guidance. This deep understanding of customer experience enables BFSI companies to streamline and simplify the account opening process, making it more intuitive, efficient, and tailored to the specific needs of different customer personas.
2. Develop User-Centric Platforms
Zero-brokerage companies have built their success on user-centric platforms that offer a seamless and hassle-free experience. BFSI companies need to adopt a user-centric approach and create platforms that cater to the specific needs and preferences of their customers. This includes designing intuitive and mobile-friendly applications, simplifying account opening processes, and providing easy-to-understand educational resources.
Pro Tip: Employ the design-thinking mindset of being empathetic.
When developing user-centric platforms, BFSI companies must keep the user at the center of the design process. This means considering the user’s needs, preferences, and pain points at every stage of the design process. Design thinking tools such as prototyping and user testing can be used to get feedback from users and iterate on the design until it meets their needs.
How This Mindset Can Help:
By keeping the user at the center of the design process, BFSI companies can create platforms that are more likely to be adopted and used by customers. This can lead to increased customer satisfaction, loyalty, and advocacy.
For example, a BFSI company could use prototyping and user testing to get feedback from customers on a new DIY mobile trading app before it is launched. This feedback can then be used to iterate on the design and ensure that the app meets the needs of customers.
3. Embrace Technological Innovation
To remain competitive in the BFSI sector, embracing technological innovation is paramount. Zero-brokerage companies leverage cutting-edge technology to provide real-time information, quick execution of trades, and personalized experiences. BFSI companies should focus on adopting emerging technologies like blockchain, artificial intelligence, and big data analytics to enhance their services. Implementing chatbots, robo-advisors, and algorithmic trading solutions can streamline operations and improve customer service.
Pro Tip: Employ the design-thinking mindset of innovation.
Technological innovation is rapidly changing the BFSI sector. To stay competitive, BFSI companies must embrace experimentation and adopt new technologies. This can be done by setting up innovation labs, running hackathons, partnering with fintech startups, and investing in research and development.
How This Mindset Can Help:
By embracing experimentation, BFSI companies can identify and adopt new technologies that can help them develop new products and services, improve operational efficiency, and reduce costs.
For example, a BFSI company could set up an innovation lab to experiment with new technologies such as artificial intelligence and blockchain. This could lead to the development of new products and services, such as AI-powered investment advisors or blockchain-based trading platforms.
4. Offer Transparent Pricing
Zero-brokerage companies have made a name for themselves by offering commission-free trading and transparent pricing structures. BFSI companies should adopt a similar approach by simplifying their fee structures and providing clear information on costs associated with their services. Transparency builds trust with customers, and design thinking can help simplify and communicate complex financial information effectively.
Pro Tip: Employ the design-thinking mindset of transparency.
Transparency is essential for building trust with customers. BFSI companies must be transparent about their pricing structures and fees. This means clearly disclosing all costs associated with their products and services. Design thinking tools such as value proposition mapping can be used to identify and communicate the value of BFSI products and services to customers in a transparent way.
How This Mindset Can Help:
By being transparent about their pricing structures and fees, BFSI companies can build trust with customers and attract new business. This can also help to reduce customer churn.
For example, a BFSI company could create a value proposition map to identify and communicate the value of its products and services to customers in a transparent way. This map could then be used to develop marketing materials and customer support documentation that clearly explains the pricing structure and fees associated with each product or service.
5. Enhance Customer Support
Exceptional customer support is a crucial aspect of competing with zero-brokerage companies. BFSI companies should invest in improving their customer service by offering multiple support channels, reducing response times, and ensuring knowledgeable and helpful representatives.
Pro Tip: Employee the design-thinking mindset of Empathy-Driven Service Design.
How This Mindset Can Help:
By understanding the customer experience and identifying areas where customer support can be improved, BFSI companies can provide exceptional customer support that helps to retain customers and attract new business.
For example, a BFSI company could use customer journey mapping to identify the key pain points that customers experience when interacting with customer support. This information could then be used to develop new customer support processes and procedures that are more efficient and user-friendly. These could be BOT support, DIY videos, FAQs, etc.
6. Leverage Data Analytics and AI
Zero-brokerage companies are adept at using data analytics and artificial intelligence (AI) to provide personalized recommendations and insights to their clients. To compete effectively, BFSI companies must harness the power of data and AI. They can analyze customer behavior and preferences to offer tailored investment options, risk assessments, and financial planning advice. This not only enhances the customer experience but also helps BFSI firms stay ahead in the competitive landscape.
Pro Tip: Employ the design-thinking mindset of creative and critical thinking.
How This Mindset Can Help:
By adopting a creative and critical-thinking mindset, BFSI companies can use data analytics and AI to gain valuable insights into customer behavior and preferences, identify new opportunities, and make better business decisions.
For example, a BFSI company could employ data analytics to uncover underserved customer personas or identify those with unmet needs. Such personas could be ‘I am here to learn trading’ OR ‘I am a seasoned trader’ OR ‘I am an HNI trader’ etc. Companies could then use this information to develop new products and services that meet those needs. Additionally, A BFSI company could use data analytics to identify customers who are at risk of churning. Marketers or strategists could then use this information to develop targeted marketing campaigns or customer retention strategies.
7. Partner with FinTech Startups
Collaborating with fintech startups can be a strategic move to boost innovation and enhance service offerings. Many zero-brokerage companies have embraced partnerships with fintech firms to incorporate cutting-edge technology into their platforms.
Pro Tip: Employ the design-thinking mindset of Collaboration and Open Innovation.
How This Mindset Can Help:
Collaboration and open innovation are better than just competing in the same space.
Some examples of how BFSI companies can foster collaboration and open innovation with fintech startups:
- Create innovation hubs: BFSI companies can create innovation hubs where they can work alongside fintech startups and other partners to develop new products and services.
- Launch accelerator programs: BFSI companies can launch accelerator programs to provide fintech startups with access to funding, mentorship, and other resources to help them develop and scale their businesses.
- Organize hackathons: BFSI companies can organize hackathons to challenge fintech startups and other participants to develop innovative solutions to specific problems.
- Partner on research and development: BFSI companies can partner with fintech startups on research and development projects to explore new technologies and ideas.
- Invest in fintech startups: BFSI companies can invest in fintech startups to gain access to their technologies and expertise and to support their growth.
Conclusion
In the highly competitive BFSI sector, the emergence of zero-brokerage companies has forced traditional firms to rethink their strategies and adopt a more customer-centric approach. Design thinking offers a framework for BFSI companies to innovate and adapt to the changing landscape. BFSI firms excel in the digital era through user-centric platforms, technology adoption, transparent pricing, customer education, support enhancement, and innovation. To stay agile and secure their position, incorporating design thinking is crucial. In the finance sector, design thinking is crucial for success against zero-brokerage rivals. Seven tips offer a competitive edge, ensuring adaptability and prosperity. Design thinking is not just about aesthetics; instead, it’s about understanding and serving the evolving needs of the customers. Moreover, it involves keeping pace with technological advancements to ensure a holistic approach to problem-solving.
About the author
A Haryanvi by origin, an entrepreneur at heart, and a consultant by choice, that’s how Ajay likes to introduce himself! Ajay is the Founding Partner at Humane Design and Innovation Consulting (HDI). Before embarking on HDI, Ajay established the Design Thinking and Innovation practice at KPMG India, laying the foundation for his later venture. His 16+ years of professional career spans various roles in product and service design, conducting strategy workshops, storytelling, and enabling an innovation culture. He has coached 50+ organizations and 2000+ professionals in institutionalizing design and innovation practices. He loves to blog and speak on topics related to Design Thinking, Innovation, Creativity, Storytelling, Customer Experience, and Entrepreneurship. Ajay is passionate about learning, writing poems, and visualizing future trends!
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