The retail finance services have provided a healthy platform for revenue generation in several corporations due to its stability. Nevertheless, the retail industry has suffered from diverse crises in the contemporary world. Thus, the retail banking remains as the most important resource for revenue in the financial services business. Due to national marketplace consolidation, the landscape of the retail banking has experienced rapid changes. As such, the outstanding success aspect of the retail financial services remains to be sustainable development, stronger invention, and the containment of costs. The retail establishments that control models remain alert on the revolution focusing on lowering costs, improving services for consumers, and augmenting the development of revenues (Arenare 2).
This report discusses the major challenges lying ahead of customer service professionals, the impacts of the projected changes in the demographic societal makeup, the impacts of technology on service delivery, the roles of marketing science, and services that foster customer loyalty.
Major challenges lying ahead of customer service professionals
Loss of customer trust
Professionals find it difficult to explain to the customers the worth of products that the financial institution is offering. In fact, this emanates due to lack of trust among the current customers. Customer trust is lost due to many reasons. First, such trust is lost founded on how the financial institutions have been publicized by the media. For instance, negative publicity leads to the loss of trust in both the existing and potential customers (Zeithaml 69). Professionals in the financial sector are forced to go extra miles to ensure that customer trusts are regained hence posing a challenge.
The existence of regulation in the industry
Regulation in this sector appears to be of great importance. The regulator may change some of the rules regarding services provided by the sector. In fact, this will require retraining of the customer service professionals. This poses a challenge since the professionals ought to restructure their game to avoid misleading the customers.
Currently, the technology used in the financial sector has changed with the changing world. This brings challenges to the customer service professionals since they have to embrace the updated technology to ensure that customer service offered are modernized.
The ever changing customer expectations
The variations in the expectations are brought by the competition in the financial sector based on the quality of services being provided in the market. Professionals in the customer service find it difficult to keep pace with these expectations. For example, a customer might find a service that is being provided in another financial firm and expect the firm to provide the same immediately.
Low budget allocations
Budget cuts in customer service leads to poor performance among professionals in that sector. Thus, to enhance performance the customer service departments in the financial sector should be seen as cost centers mandated to allocate ample funds to run the departments. This might lead to motivation among professionals in the customer service sector hence good performance.
Lack of motivation
Most professionals in the customer service may not be motivated due to the working environment and poor remuneration strategies in the firm. Professionals need to be motivated so that they can perform well in their field and realize the firm’s objective.
The impacts of the projected changes in the demographic societal makeup
Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics. The demographic trends of concern include:
- The changing age structure of the population.
- The changing family set up.
- Geographical shifts in population.
- Better educated population.
- Increasing diversity.
The change in the age structure of the population will have an impact on the retail sector of the financial services. That is, the firm will have to change its financial products to suite the new generation in the society. An example is when majority of the populations in a society change to people at the age above 40 years. Thus, for the firm to remain competitive in that society they have to develop products that suite that population (Arenare 4). The changing family setup in a society will also affect the retail sector of the financial services. The family set up contributes a lot to the affordability of the financial services and the need for various products offered by financial services institutions depend on the family setup. Any family with children will require school fee transactions.
Geographic shift in population may proffer a good market for the products offered by the financial sector or generate negative impact on the same. If the population is high it will lead to good market and competition will be high. However, better educated population in the society drives the demand for quality products and services from the financial sector. Products such as loans to finance the education of this population will be required. Hence, the retail sector of the financial services will require developing such services for them to remain competitive in this kind of a society (Arenare 6). Increased diversity enhances competition from various firms in the same industry. Such firms have to expand their services to cater for the needs of the customers.
The impacts of technology on service delivery
Technology keeps on changing and in future the financial sector will be forced to employ advanced technology of that day to remain competitive. The emergence of internet in the provision of financial services has brought about opportunities that need to be tapped in by corporations (Borbon 32). As result, services delivery in the financial services sector will be positively impacted on by future technology as explained below.
Large customer connection
With amplified stresses emanating from the mounting demands for personalization, availability, and suppleness, fiscal amenities firms must appraise their know-how to accomplish clients’ expectations and desires. Cloud computing and other appliances must pool cutting-edge gears to ensure that consumers in the monetary sector get amenities and products that are value-added.
Innovative and advanced monetary services division
Supervisory forces might be high and rivalry could come from the existing participants and fresh firms which enters the market. These pressures will make financial institutions to look for new methods of doing business for them to remain competitive in this industry.
Firms which utilize know-how when serving their clients could carry the day. In the coming decade the financial service sector will take its focus on customized services that are value added. Through combination of these various technologies, firms will develop advanced customer relationships. Thus, consumers will be in a position to manage risk, plan for their retirement, have good healthcare services and build wealth.
The varying marketplace
The call for the monetary services might intensify among different age groups. The financial services sector will need to customize its services to suite this different age groups since they will have different needs. Competition for these services will increase among firms offering financial services. This will be an advantage to the consumers in this sector given that it will lead to affordable services and services of great quality.
The role of marketing science
Marketing science entails understanding the customer needs and developing approaches by which customer needs will be fully met. This is done through science (Porteous and Tapadar 35). Marketing science may be used in research in the financial services industry. The roles that marketing science plays include:
- Realization of customer needs.
- Facilitates good decision-making in the financial services sector.
- Helps in identifying the best target prospects in the market.
- Facilitates feedback from customers.
- Enhances competition in the financial services sector.
- Consumer purchasing behavior is well learned by the firms in this sector.
- Prediction of future market trends in the financial services sector.
Services that foster customer loyalty
This includes all marketing communication which let the public know of the product or service. They include:
Advertisement is a paid non-personal communication done by an identifiable sponsor. Advertising draws new products to the public attention, remind the public that older products exists and positions the product in the customers mind.
Sales promotion is essentially a short term technique used to boost sales over a particular period to encourage customers to try the product. Promotions help in ensuring customer loyalty. If the firm wants the customers to do something for it then it should also be ready to do something for the customer (Zeithaml 74). Promotions make customers happy since they feel that they are part of the business. As a result, they can air their issues freely to the management and this enhances the provision of improved services.
Best customer identification
It is useful to identify frequent customers in this business. Basically, this is as good as identifying their needs and wants. This should lead to the development of a database that should be used by all the relevant departments in the financial services firm. The database that is developed should contain the following aspects that are useful to the business:
- Customer service history.
- Requests and special orders made by the customer.
- Names and addresses of the customers.
- Monthly or annual transactions by the customer.
- Feedback given by the customer regarding the services offered by the financial service firm.
- The type of services offered to the customer.
Data base monitoring
After developing the database it is advisable to keep updating the customer information in the data base. These include how frequent the customer seeks the services of the financial institution. This will help to note any changes that may occur regarding customer behavior for instance when the customer seeks less services from the financial institution. The more up to date the database the more useful it will be when analyzing some current trends. This will lead to the identification of customer needs hence better services and customer loyalty.
Favorable price for services offered
Customer loyalty is also gained by charging affordable prices to the services offered by the firm. This ensures affordable services to the customers and they will keep on seeking such services.
The retail finance services tend to provide a healthy platform for proceeds generation. However, the industry suffers from dissimilar predicaments in the current competitive environment. These include challenges to customer service professionals, the impacts of the projected changes in the demographic societal makeup, the effects of technology advancement on service delivery, the roles of marketing science, and services that foster customer loyalty. As result, the retail services industry must have strategies in place to remain ahead of other market competitors.
Arenare, Tommaso. Retail Financial Services. 2014. Web.
Borbon, Ernesto. The Effects of Technology in Retail Banking. California, United States: Universidad, 2003. Print.
Porteous, Bruce and Pradip Tapadar. Economic Capital and Financial Risk Management for Financial Services Firms and Conglomerates. Kent University, UK: Palgrave Macmillan, 2005. Print.
Zeithaml, Valarie. “Service Quality, Profitability, and the Economic Worth of Customers: What We Know and What We Need to Learn.” Journal of the Academy of Marketing Science 28.1(2000): 67-85. Print.