Customer Confusion in the Financial Services Industry (FSI)
In the late 20th century FSIs started changing into a distinct shape entirely. Previously, a financial services institution provided only banking services (i.e. mostly a place where you can deposit and withdraw money or suchlike assets). However, banks modified their role in a relatively quick time from customer banking to multiple FSIs (i.e. banking, mortgages, insurance, credit cards, capital and bond market services, internet banking, phone banking, investment finance, etc.). This revolutionary management of consumer credit and consumer debt had fascinating implications for their selling financial functions.
First, in attempting to address every corner of the envisaged legal challenges, FSIs already had time-consuming contract papers. All The Same, with multiple services customers were at once subjected to a combination of bountiful and contravening info, an abnormal number of brands, and product replications.
Second, this one-stop service doctrine was instituted about to make simpleness in dealings. All The Same, as the count of functions increased, the complexity did too. All The Same, on the other hand, it made incorrect assurance within the customers regarding their financial assessment. All of the above mentioned financial functions involve variant set of skills to cope with them. However, a single provider and one-stop-shopping made customers conceive that capital and bond markets investing were as open as banking.
Researchers hint that product diverseness can have a importantly beneficial effect on consumer decision making However, results from data-based studies learned that over-choice and overcharge of selective information deters customers from pursuing with a service provider due to confusion over a product’s value.
The multiplicity of financial services, which produced the unrealistic surity, may have corresponding effects connecting to customer confusion and service value sound judgments as noted in other sectors where product proliferations took place. However, previous debates have not looked at consumer confusion in financial service industries.
In a recent article, published in the association for customer research conference, investigators (Dr. Paurav Shukla, Dr. Madhumita Banerjee and Dr. Phani Tej Adidam), attempted to conceptualize and through empirical observation, test a model of consumer confusion in financial sector.
The investigators found significant impact of expectations, attribute confusion and information confusion on overall consumer confusion. The research article talks about how such confusion can deter clients from engaging with a financial institution. It has long-term implications regards to attracting and keeping clients for FSIs.
Increasing understanding of customers and diminishing confusion is one of the basic targets of any organization. Moreover, in marketplaces such as financial functions, where numerous similarities of expectations, attributes and data exist within consumer minds, reduction in consumer confusion can become a source of competitive advantage. The model applied for this paper provides marketing managers with a first hand estimate of where and how consumer confusion is caused. This will aid marketers in optimizing their firm resources to manage the multi-faceted phenomenon of customer confusion. Marketers addressing customer confusion as a single tier concept may meet unsuitable consequences.