The 2014 Murray Inquiry into Australia’s financial system presented us with key findings on what the future might hold for financial services in Australia.

The 2014 Murray Inquiry into Australia’s financial system presented us with key findings on what the future might hold for financial services in Australia.

While there are arguably many aspects involved in creating a sustainable financial system, one component which financial institutions can’t afford to overlook is the investment in technology and how it is used to improve the customer experience and increase competition in banking.

Improving customer experience

There is no doubt that technology plays a huge role in the way we live our lives today. From streaming music digitally to shopping online, we are used to doing things from the comfort of our smartphone or PC – and doing our banking is no different. Even at a very basic level, people expect to be able to interact with their financial institution anywhere, anytime and on any device. Gen Y, in particular, has grown up online and engaging digitally comes as second nature. It is customer behaviour such as this which is largely driving innovation.

We have seen a clear trend in recent years whereby Australians have shown a greater affinity for personal finance management. The good news is that technology is moving at such a pace that there are few limitations around what we are able to achieve in order to help them do so. On the flipside, it can be all too easy to get caught up in what we are capable of doing using technology, rather than what we should be doing to deliver real benefits to the customer. Therefore, the challenge I see for financial services organisations is to truly understand what the customer values first and then go ahead and deliver on that.

Creating greater competition in banking

For competition to truly thrive, you need to have a situation where customers can freely choose between alternative banking products and services. As Australians are increasingly time poor, it is understandable that they are prioritising efficiency and ease when it comes to money management – and technology plays a big part in making this happen.

For example, rather than being content to leave it to the banks to dictate what they do with their money, they are researching, comparing and buying using online tools and platforms which allow them to make their own independent decisions. The appetite for change is there, but to date switching behaviour has been low – despite the reforms introduced in 2012 designed to make it easier to switch banks.

The fact is that although there are lots of financial services providers out there, there are still very few genuine alternatives. That is why it is encouraging to see the Murray Inquiry acknowledging the changing needs of customers and the importance of digital delivery, including the recommendation for development of a national digital signature.

Customer centricity has always been important, but the reason customers struggled was because they had alternatives but limited or no real choice. They were forced to use the same or similar products – just with different brands. Now they have better access to distribution channels as well as dealing with their finances online and via mobile. We have to support the way customers want to deal with their finances; with technology we have the opportunity to change the customer experience for the better.