Financial Services

Expect the Traditional Payments Ecosystem to Change, Fast

COVID-19

During times of crisis, such as the current COVID-19 pandemic, how you treat your employees and your customers speak volumes about your values. The communications I have received from my financial institutions regarding the coronavirus outbreak focus on predictable messages – “we are here to help you 24/7,” “our call volumes are high, look at our FAQs,” “enhanced cleaning procedures to limit the risk of exposure,” and descriptions of transactions that can be done online with links to their mobile apps. Nice, appreciated, but predictable.

Once this crisis is over, and we begin to think about lessons learned, the financial services industry will be thinking much more about how to better deliver digital product offerings as well as personalized financial solutions. Imagine being able to easily ‘personalize’ a product – like offering temporary, flexible payment terms on mortgage payments, or allowing someone to skip a payment. That capability will stick in a customer’s mind long after the next crisis passes, and it will be invaluable to cementing customer loyalty.

Financial Services - It's Time to Focus on Post-Digital Transformation in Banking
It's Time to Focus on Post-Digital Transformation in Banking

Digital transformation challenges in banking have been well understood and the strategies to address them simple and clear. However, it is becoming increasingly apparent that the industry is reaching a tipping point in the digital transformation journey.

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“Social distancing” and staying home for an extended period of time will cause more than short-term changes in customer behavior. There will be a structural change in the way people shop as customers are introduced to new shopping methods. The financial services industry can use this structural change to accelerate the change of the traditional payments ecosystem. The traditional ecosystem exposes us to the risk of a COVID-19 infection – ATM touchscreens, debit cards, POS terminals with keypads and stylus pens, the folio in the restaurant with the bill, and the pen they give you to sign the check. Even when you use a digital wallet, you often still have to enter a pin, confirm that you do or don’t want cashback, answer a number of other questions, and press several keys on the payment pad just to complete the transaction.

As part of its research into consumer payment preferences, The Futurist Group found that 38% of people said they would only consider a card offer with a contactless feature. Contactless payment products and services are now table stakes. That’s an increase of 26.8% over the firm’s previous round of research.

What are your plans to educate and promote existing digital wallet, P2P payment, and contactless card features? Are you planning to introduce new contactless cards? A targeted campaign to educate your customers about the benefits, as well as the functionality of these products, makes a lot more sense now.

If you have any questions or would like to discuss how we can support you during the COVID-19 situation, please let me know.

About the Author

Scott Albahary applies his wide range of knowledge and skills to advise Perficient’s financial services clients on business and technical strategies and on defining, developing, and implementing these specific strategies.

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