Financial services customers are currently served on a product-by-product basis. However, the market needs to move towards targeting specific consumer groups or needs and holistically servicing them, according to GlobalData Financial Services.
This can be achieved by incorporating elements from multiple areas (such as savings, investments, and protection) into a single lifestyle product.
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In Malaysia, CIMB Bank and its bancassurance partner Sun Life have launched a new retirement planning scheme that has evolved beyond traditional financial services product boundaries by providing protection insurance, investment, and a guaranteed yearly income in a single plan.
Under the Sun Income Secure scheme, customers can benefit from a guaranteed yearly income for up to 20 years.
They can choose their desired annual income amount based on what age they wish to retire, which can range from 50 to 65 years. Clients can choose to invest in professionally managed investment-linked funds for potential returns.
The product also provides an element of protection insurance, with a lump sum payment made in the event of death or total and permanent disability.
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By GlobalDataThis product has been designed with consumers in mind. It has focused on what they require from financial services in retirement and incorporated elements from savings, investments, and protection to fully service these needs.
Future of financial services
The scheme represents a glimpse of the future of financial services products. Going forward it will no longer be sufficient to satisfy a single need. Instead the market will shift towards customer- and lifestyle-focused products that holistically tackle a specific issue or life event, such as retirement.
Another example is the property space. Home buyers need financial services providers to help with a range of steps, such as saving towards a house, getting a mortgage, buying protection insurance, and purchasing home insurance.
In the UK, where many institutions offer all of these services, there is an opportunity to bundle these offerings into a single product.
This approach would be highly convenient for consumers. If would also help improve uptake of products such as protection insurance if it was incorporated into more commonly demanded products such as savings.
This in turn would help improve the financial resilience of customers, which should be one of the primary aims of the financial services industry. Providers must consider how they can move beyond traditional product boundaries to better service their customers.
