bankingciooutlook

Behavioral Economics, the new formula to Maximize CX Efficiency

Banking CIO Outlook | Tuesday, June 18, 2019

Behavioral economics is emerging as a technological synonym for exploring how vendors and buyers make their choices.

FREMONT, CA: Behavioral economics is a visual map of customer activities, choices, and reactions, transformed into information, analytically aggregating the economic marketplace of individual actions and thoughts.

In favor of what younger customers call frictionless: the smartphone in their pocket, behavioral economics rejects the traditional method. The behavior to which younger customers react is the satisfaction found in performing immediate banking transactions, without waiting, without running to a branch, without wet signatures, without products they don't need at the time, without complicated circumstances, and without investing in a personal relationship. Moreover, Generation Z's millennials and employees have an intense desire for fairness.  

Over $150 billion is probably to be invested in fintech over the next three to five years, according to PricewaterhouseCoopers — companies that have commanded over $23 billion in venture and development capital over the previous five years. The job of the marketer is not only to beat rivals but also to convince shoppers to part with their cash. Marketers need to realize that clients are people whose buying choices are profoundly affected by feelings to enhance commitment. By assisting marketers in identifying behaviors and adapting to irrational biases and emotional requirements and needs of clients, behavioral economics can provide valuable perspectives for marketers.

Some of the keys to behavioral economics' achievement are its commitment to client requirements, the ready availability of data analytics, and the velocity and ease of decision-making, which allow companies and clients to manage transactions effectively. Fintech's innovation is based almost completely on the unique experienced requirements of clients aggregated into a service platform. Fintech partly occurs as a behavioral response to people's feelings about market procedures.

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