For many financial service providers (FSPs), offering only credit is becoming a less and less valuable proposition. Fierce competition in many markets drives FSPs to seek to gain and retain market share. Offering non-credit services can be a solution.
Deposits can cut funding costs. Insurance, payments and other services can help diversify revenues with commissions and fees. FSPs can benefit from offering their target clients a wider range of financial products and services, particularly “sticky” ones that keep clients around until they or perhaps their friends and families do need a loan.
FSPs are generally well positioned to bundle financial services. They can leverage the cost of distribution and payments to offer more cost-effective one-stop shopping that can help reduce the marginal cost of offering new products. But one-stop shopping is not as easy as it sounds. It relies on effective sales strategies, which will become more and more critical for FSPs that serve low-income clients as they broaden their product offerings.
As financial service providers broaden their offering of products and services, they will leverage the relationship and outreach of their existing sales force more and more. Yet placing too much of the burden of sales on this staff may lead to their providing inconsistent or insufficient information for consumers to make sound decisions. Designing effective front office tools to support sales can help to ensure that customers receive a standard and appropriate amount of information they need to make informed decisions while ensuring that the last-mile delivery of services can be cost-effective and financially viable for FSPs.