Overview of the Consumer Financial Services Industry
With regulatory changes and emerging technologies, financial institutions are transforming the way they manage risks and improve business effectiveness. The global consumer financial services industry typically includes establishments involved in offering personal loan services, credit card services, mortgage lenders and brokers, and consumer leasing providers. Moreover, renowned organizations in the consumer financial services space are focusing on improving their operating models to provide better transparency into the services rendered. Despite the financial crisis, prominent consumer financial services providers are focusing on offering reliable and affordable financial services to meet the growing consumers’ demands. Although the consumer financial services space is witnessing promising growth, some of the factors influencing the growth of the space are:
Meeting the rising demand for customer services: Since the financial crisis, prominent consumer financial services organizations are facing public scrutiny to regain customer trust and re-establish economic strength. In this era of seamless internet banking, there is a huge gap between the institutions and customers. With the rising demand for reliable and affordable services, leading financial services providers are facing pressures to deliver agility in the services rendered.
Cost reduction and efficiency: The growing competition in the financial services space is compelling organizations to offer reliable solutions at reasonable prices. Also, the regulatory changes implemented by the authorities to bring the cost of the services to a considerable rate are further forcing businesses to act in accordance with the compliance requirements.
Leveraging technologies and innovations: The rising market consolidation and technological advances are forcing prominent consumer financial services providers to stay relevant and updated with the current technologies. Moreover, the growing concern to enhance the market share and profit through brand differentiation is compelling businesses to offer innovative products and services to the customers.
To address these challenges and meet the increasing preferences of the customer segments, prominent organizations are facing the need for a category management solution. Category management involves the process of applying procurement methodologies to ensure maximum savings.
The Business Challenge and Journey
The client, a prominent consumer financial services provider, wanted to conduct an in-depth market analysis and focus on specific areas of spends. The client wanted to create data transparency and ensure sustainability in the services being rendered. Moreover, the client wanted to seek ways to tap procurement cost-reduction opportunities by coordinating and centralizing procurement activities. With the help of our category management solution, the client wanted to categorize the services into logical groups to efficiently allocate resources. Moreover, the primary objective of the client was to understand the price trends and fluctuations for the services being rendered and identify savings to promote growth opportunities.
To retain focus on the most important business categories, SpendEdge’s category management experts carried out an extensive research. The comprehensive methodology comprised of interviews and discussions with prominent stakeholders in the consumer financial services space. Moreover, to gain adequate insights into the strategic sourcing, category management experts at SpendEdge also compiled information across a wide array of secondary sources such as paid industry databases, company presentations, and industry forums.
The category management solution offered by SpendEdge helped the consumer financial services provider gain adequate insights into the consumer buying patterns. The client was also able to focus entirely on the service category and categorize the services based on the market trends. Moreover, the client also sought ways to analyze the current market opportunities and enhance their marketing strategies to meet the business requirements.
Key questions answered in this category management engagement
During the course of this engagement, the consumer financial services provider was able to realign their marketing strategy to attract customers by offering a differentiated set of services. The client was able to streamline their procurement functions and design compelling assortments to price and promote the services in the market.