Insights for April-24

On my mind this month

Unlocking Hyper-Personalisation

Hyper-personalisation is a hot topic for many of our financial services clients. The ability to tailor products and services according to each user's financial circumstances is the holy grail. We’ve seen the impact in action via our work with Snoop. In combing open banking and machine learning Snoop gives personalised advice to over 2 million users daily and is a much-loved brand. More recently, we’ve been working with a major high-street bank and a significant investment firm to consider how hyper-personalisation could add value to users and the business alike. To augment our understanding of customer attitudes towards hyper-personalisation, we recently surveyed 100 customers across various profiles.

The findings highlighted a few critical points to consider when taking forward personalisation strategies: 71% of users appreciate personalisation for enhancing their digital experience.

However, we also learned that personalisation must be navigated carefully; insight without actionable outcomes can lead to user anxiety, and 60% expressed concerns about losing sight of broader options—echoing my own experience of being stuck in a '90s alternative music loop on Spotify.

Crucially, the survey revealed a strong user preference for security and privacy over personalised experiences. Despite this, 69% expressed a willingness to exchange data for personalisation, if the value exchange is clear and justified. This highlights a delicate balance: users value personalisation but not at the expense of their privacy or access to diverse options.

Successfully navigating this balance is key to unlocking the full potential of hyper-personalisation in financial services.

This month, we have a newsletter full of insights:

1. The Business of Private Equity Investing with Richard McDougall (Cabot Square Capital)

2. “Fees for No Service”, Ongoing Advice Fees and Consumer Duty - Observations

3. Supermarket Banks – The End of an Era?

1. The Business of Private Equity Investing with Richard McDougall (Cabot Square Capital)

After a long bull run, private equity investment fell off significantly last year. Will dealmaking return in 2024? In this video, L.E.K.’s Peter Ward sits down with Richard McDougall of Cabot Square Capital to talk about:

• Challenges that private equity investors face amidst recent market conditions
• Prevailing trends that each private equity firm must respond to today
• How private equity investors are thinking about deals in the current environment

Get a frontline perspective on the current state of private equity investing, from fundraising to value realisation.

Featuring: Richard McDougall and Peter Ward

Watch the video

You may also be interested in:

·        ThinCats' Growth, SME Lending and Market Opportunities

2. “Fees for No Service”, Ongoing Advice Fees and Consumer Duty - Observations

In the aftermath of St. James’s Place setting aside £426m to refund clients for services no delivered in the past, we have been speaking with our clients and regulatory experts to understand the impact for the wider advice industry and how advice firms can manage their potential refund liability.

In this article, we answer three key questions:

• How firms measure and minimise the impact of "fees for no service" by providing good data triangulation
• What sort of advice and data protocol should be set up to minimise future risk
• What to do with pricing and propositions

Read the full article

Author: Bronswe Cheung Eilert Hinrichs Ashish Khanna Richard Trueman

You may also be interested in:

Target Operating Model in Financial Advice

The Next Frontier of Value Creation in Wealth Management

Investment Opportunities in European Wealth Management

3. Supermarket Banks – the End of an Era?

In this article, we give our views on why Tesco and Sainsbury’s are pulling out of banking, and what it means (and doesn’t mean) for the broader affinity banking industry. We conclude that this is more a question of focus and strategy rather than viability, and that the broader opportunity for affinity banking, done well, remains substantial.

Read the full article

Author: Peter Ward

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Ashish Khanna, Peter Ward, Eilert Hinrichs, Sam Halliday, Bronswe Cheung, Pretam Singh, Douglas King, Richard Mould, Gigi Wong, Sam Shinner, Clayton Souza, Felipe Ahouagi

The L.E.K. financial services team helps clients develop fact-based, practical, winning strategies for our dynamic sectors. Our work for investors, shareholders and leaders brings insight and a rare breadth of experience and perspective to drive strategic decision making.

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