The Use of Digital Tools for Customer Engagement in the Financial Services Sector

Introduction

The Business landscape over the years has changed unprecedently. Globalisation was a bitter-sweet pill. It created a host of opportunities for the strong industry players giving them access to markets worldwide, the potential of scale economies and chances to advance their learning curve through best practices, management techniques and technologies. (Helpman, Melitz and Yeaple, 2004; Bernard, Redding and Schott, 2004). On the other hand, it made the industry extremely competitive and difficult to manage for weaker players. The policies and regulations favoured a dynamic, progressive firm that could transform according to the new world. The sectors and companies that had bred over the years under the shelter of the protectionist regime in India like that of financial services were faced with threat of global players. From products to services to processes, everything required a massive facelift for the players in the Indian industry. Companies in the financial service sector, experimented, innovated, reengineered and restructured themselves to survive the onslaught of competitors. They advanced and created strategies and tools that can help them establish their forte in the industry and retain their share in the market.

One invincible and imperative part of their competitive warfare was marketing. Marketing which was traditionally viewed as a company-oriented concept focusing on creating demand for the company’s products and services, underwent a massive change with companies shifting the focal point from self to customer for sustainable and long-term growth. Though customer perspective was apparently always a part of marketing, but this shifting of power game is a phenomenon of recent decades. This new perspective is the basis of the marketing philosophy that companies, including those in the financial services sector practice today. This has led to the inclusion of concepts like customer satisfaction, customer retention, customer relationship management and value creation in the business processes of financial services firms. The companies have been earnestly exploring new ways to attract and retain customers and technology proved to be an accelerator in the efforts these companies made. The marketing toolkit also evolved with the technological developments taking place. As the use of the Internet proliferated, there was a large attrition in the customer base of traditional marketing methods. The target audiences moved their attention away from traditional offline marketing to online marketing. The computers, tablets and mobile phones became ‘our windows to the world’. When consumers moved on to the new age media, companies followed suit. In the initial times, the Internet was seen as an additional media where companies vied for eyeballs. But it was soon realized as a tool that could be operationalised to not only promote the products and services but also to involve and engage customers for co-creation on different platforms and services. Borrowing from Hennig-Thurau et al. (2010) “websites and other digital communication and information channels in which active consumers engage in behaviours that can be consumed by others both in real-time and long afterward regardless of their spatial location” is defined as digital media. Digital media have significantly altered the way businesses communicate and interact with consumers (Lee and Cho, 2019). The process of digital marketing is making use of digital media like search engines, email, websites, social media, etc to connect and engage with current customers and prospective consumers (Troise and Camilleri, 2021). Customers too have evolved in the way they interact with companies today. They are no longer limited to the roles of a buyer and user of a company's product or service at the end of the value chain. Instead, they wish to actively participate in shaping the offering to meet their individual needs and desires. Customers attempt to engage with other consumers, organisations, and communities sharing similar interests and meet their needs and contribute to the organisation's goals (Jaakkola and Alexander, 2014).