It is undisputed that the pandemic has created new barriers in the way people finance and pay each other, and many of the resulting changes in consumer behavior are here to stay. From banks reducing branch access and opening hours to fear of the spread of COVID-19 through the exchange of cash, the coronavirus pandemic has accelerated digital transformation within banks and led to an increase the use of digital payment applications.
In 2020 alone, Venmo processed $ 159 billion in total payment volume, which is a 59% increase from 2019.
However, despite this rapid acceleration towards digital adoption, most financial services organizations have not adapted their digital technology tools to meet changing market needs. A recent report from Accenture found that while 78% of banks collect data, only 7% use analytics and only 5% activate AI capabilities to take full advantage of data at every stage of the customer experience.
As we navigate such changes and consumers increasingly manage their money on digital platforms, banks, payment applications and financial services organizations must evolve these key tools to meet consumer expectations.
Below are five considerations financial services organizations and banks should keep in mind as we navigate the new normal:
- Adopt technologies that improve the customer experience: The financial services industry would be keen to consider adapting AI technologies such as conversational design. Since companies like Apple and Google already provide digital wallet apps and contactless payment options, they have the potential to facilitate the majority of digital payments and banking down the line. In order for banks to meet industry standards, it’s time to consider revamping their digital technology rolodex.
- Create customer profiles: The circumstances of the past year have catapulted us all into e-commerce, the digital landscape, and the old brick-and-mortar banking solution not working for the next generation of consumers. To stay relevant and meet consumer expectations, banks must re-evaluate their digital communication tools to hyper-personalize interactions with customers. By partnering with an omnichannel communications provider, financial services organizations can leverage the data to create personalized customer profiles to anticipate needs and share the to the right message to the good time.
- Reassess customer segmentation: In addition, now is the time for banks to reassess or create a customer segmentation system. Customer segmentation will help banks personalize customer interactions by grouping customers with similar needs into a group. For example, if banks can identify customers who are financially at risk (think: employees who haven’t received their wages, self-employed people in times of drought, and businesses that aren’t eligible for Covid-19 relief funds) and sending them useful information about benefit plans or short-term loans, customers will feel like the brand understands their specific needs, which will ultimately lead to more satisfied customers.
- Secure your platform to protect customer data: In addition, banks must ensure that their digital platforms are secure and do not put consumers’ information at risk. During the pandemic, cyber attacks have increased at an alarming rate and, according to an Interpol report, phishing scams have increased by 59%, malicious domain use has increased by 22% and we have recorded a peak of 36 % of malware attacks. For banks to protect customers, it is crucial to integrate proactive communication tools to mitigate fraud and authenticate the identity of the customer.
- Educate Customers: In addition, financial services organizations should educate their customers on ways to identify a cybercriminal. To begin with, banks should inform consumers that they will never send a bitly link in any correspondence, and therefore consumers should never click on bitly links in messages. Consumers can also protect themselves by controlling all messages from their financial service provider. To verify text messages, consumers should always check the brand’s online portal before further interacting with the text message.
As we move towards the new normal, banks that revamp their technology will have an extreme advantage over those that don’t. From now on, only time will tell what the future of the bank will be.
Mr. Brien Jones-Lantzy is the Head of Carrier Relations for North America at Infobip.