A key output of this project will be to help influence financial services regulation in the UK.
As a result of the Retail Distribution Review the costs of financial advice are not hidden within longer-term charges, i.e. they are both more apparent and not spread out. This is less of a problem for more wealthy people. However, it is significant for less well off people who require advice, but are less able to deal with large up-front costs.
The government seeks to provide a set of basic financial products that are intended to be sold without advice. But a large proportion of the customer/members of financial mutuals are less well-off and may be stuck in the middle. Too poor to easily shoulder the burden of bespoke financial advice and with personal financial requirements that are too complex for basic products.
There may be an opportunity to automate, centralise, share-out, or standardise the various aspects of the advice process, as experienced by customers on their customer journey. This would reduce the cost of giving advice and potentially open up the possibility of advice to more of the market.
This project investigates the customer experience of being advised and how this is different for customers with different needs – actually and potentially. The first aspect of the project analyses customers by their different needs [both on a product level, product variant level and in terms of how such products help them get to their personal goals, i.e. do the products help? Why are they needed in the first place?]. This aspect will also consider tools from behavioural economics.
The second aspect of the project investigates how each type of customer from the first aspect consumes [or needs to consume] the advice service as a process, i.e. as a customer journey. For example they start with some realisation of a need for some sort of financial product which can be initiated from many sources. They then go through the well known ‘Customer Buying Process’ of looking for options, looking for information on options, trying to decide between options etc. eventually some customers decide to purchase and then they purchase. Then there are post-purchase stages.
The ‘Customer Buying Process’ generates a different customer journey for different individuals and these days the advice component takes place across multiple channels, technologies and time periods with the potential for multiple looping and repeating of stages. However, the complexity that is inherent within this can be modelled at some level to produce a Customer Experience Model, i.e. a model of how the different values, needs and interests of customers can be used to segment them in one dimension and how the stages of their personal journey can also be segmented in the context of the advice that they require. The model assesses how well the advice that they receive fits their needs on a stage-by-stage basis. A bi-product of this model will be a set of recommendations to improve user experience and customer relationship management processes.
This sort of change to how the advice service is produced would have to be agreed with the regulator and may require a change in legislation. So the Customer Experience Model that is the key output of this project would be a method for assessing the requirements of customers and potentially a rigorous logic for justifying the need and the form of such a change. The Customer Experience Model will be designed to prove if the advice needs of particular consumers of financial products can be well served by some new ways to produce such advice.
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