It is always risky to generalize about the Financial Services industry, as it seems the only constant is change itself. However, there are certain trends that are impacting the industry:
- Cross-channel services. It is no longer a question of brick-and-mortar or online; the answer is both. The challenge is how to provide a consistent, compelling brand and customer experience across channels.
- FinTech start-ups will continue disrupting the industry. Many of these start-ups are becoming household names (e.g., PayPal, LendingTree), attracting new customers with easy-to-use and often less expensive services than traditional industry players.
- Increasing concern about security. For everyone in the industry and all customers, security is an over-riding concern. In fact, in one study, 64% of consumers said they would not do business with a company whose data had been breached.
- Need for new revenue streams and business models. International expansion by tapping into the rising middle class in many countries can be an attractive growth opportunity, as can finding new ways of serving Millennials and younger customers.
The Role of Employee Engagement
Strong employee engagement can help financial services companies weather these trends and more. By investing in employees, their productivity increases, their service to your customers increases, and your organization thrives. Consider these statistics from Quantum Workplace:
- For banks, 20% of business lost to competitors was due to poor service.
- Disengaged employees make 100 times more errors than engaged employees. In an industry where even a small error can be quite costly, disengagement is unacceptable.
- In banking and finance, employee retention saves money. Employee turnover costs are estimated at 20% of salary, as well as the costs of severance, and recruiting and on-boarding replacements.
- With the industry bouncing back, your employees have a lot of options. Engaged employees are 87% less likely to leave than their disengaged colleagues.
- In financial services companies where 60% to 70% of employees exhibited high engagement, total shareholder return was 24.2%. In financial services companies where the percent of engaged employees fell to 49% to 60%, total shareholder return dropped to 9.1%.
The Employee Engagement Solution
For financial services companies, employee engagement is too important to leave to chance. It is critical that you measure engagement, align your processes to address disengagement, and develop policies and rewards systems to continually recognize engaged employees. In financial services, there are some unique characteristics that stand out about employee engagement:
- Senior Management must be seen to be moving the company in the right direction. More than other industries, employees in financial services look to Senior Management for direction and confidence in the company’s future.
- Provide opportunities for training and development. Financial services companies who invest in their peoples’ careers are rewarded with higher engagement. Employee engagement is especially strong when financial services companies offering the opportunity for career growth, help employees develop new skills, and generally support employees’ growth and development.
- Employees are proud of their organization. In addition to overall satisfaction, financial services employees must be proud of the company and feel that their values align with the company’s values.
- The role of the immediate supervisor in creating engagement is critical. More so than in other industries, in financial services the immediate supervisor connects the employee to the organization, significantly enhancing engagement.
Financial services companies are unique in that they create very close personal bonds with their clients. Engaged employees are the only way to maintain, enhance, and grow those critical relationships. Managing employee engagement is a key success metric in the financial services industry.