All aspects of life in developed and developing countries are being touched by the growing number of devices that keep us digitally connected. We can shop, bank, move money from person to person and use apps that help us monitor our health. No financial services organization has been immune to this digital tsunami. Even as the digital web around us continues to weave itself into our cars and homes, many providers are still trying to figure out what strategy will help them fully capitalize on this opportunity.
The Voice of a New Generation
According to a survey conducted by Mercator Advisory Group, the percentage of those preferring to
Some people, with particular valuations to inflate, want to extrapolate these associated trends to suggest that the future will be ruled by mobile-only phenomes. This is no surprise as vested interests are a well-known source of nearsightedness. A more balanced, historic look at financial services and some other industries (e.g., retail) teaches an entirely different story.
Can the Payment Channels Evolve?
No channel ever completely dies. The preponderance of transactions in the United States is still cash-based. The ATM will be 51 years old this year. Payments using mobile phones are still struggling for transactions because the good
So it will be with physical locations such as bank branches and stores. They will not disappear entirely; however, what they offer, how they offer it and how what they offer is consumed will change. All these factors will drive successful financial services providers to continually re-evaluate their points of interaction within this growing set of channels to optimize whatever channel the customer is using. That, it must be noted, is no easy game to play.
There are subtle differences in each channel that present challenges and opportunities. Financial institutions must find a way to make digital not only a channel for delivering new conveniences but also a pipe through which "high-touch" interactions are possible. The current dust-up around what consumers expect from online account opening and what is offered by banks and credit unions is a good example of a “fail” in this area. Consider also the friction when purchasing dog food with your card at the grocery or favorite pet store compared to the lack of same when making the purchase on Amazon. The level of personalization Amazon achieves, even though it still could be improved, far exceeds even rock star retailers such as Nordstrom.
It is important to note that personalization is only a small part of what customers are coming to expect in any digital interaction they have with any organization. Anticipating the needs of consumers even before they know what those needs are is the next stage in the ongoing evolution of their expectations. Sadly, no one today, not even Amazon or Apple, does an adequate job of achieving the type of anticipatory user experience.
It will take more sophisticated systems, more data, more predictive algorithms and even AI to get to this goal. Systems will have to achieve much higher performance levels to do the type of computational exercises necessary to anticipate the wants and desires of consumers. In addition, these systems will need to deliver a level of customer experience of a far higher quality than most services providers deliver today. The results will need to be near flawless because once an organization “misses badly” when trying to anticipate the consumer’s needs, the brand of that organization will suffer for it.