From wearable payments to scoping mystery shoppers in 2017
In 2017, technology will continue to play a vital and growing role in financial services, but some weary and mistrustful customers, especially Millennials, want a more personalized touch.
Matt Herren, product manager of payment analytics at Computer Services, Inc. , even suggests we’ll soon use custom wearables as payment devices.
And banks must stop spending billions on paper statements, says Jon Deutsch, vice president and global head of financial services for the software firm Information Builders, headquartered in New York City.
“Many retail banks can cut statement delivery costs, retain and attract customers as well as automate information delivery with interactive e-statements and in-document analytics,” Deutsch says.
Whether your calendar is printed or stored on a tablet—maybe you even brandish a mix of the two—mark it for these seven forecasts to track in the year ahead.
Technology, properly: Self-service is king
“When thinking about technology, consider more than just Millennials. Users of all ages will continue to push the boundaries in mobility to make their lives easier, with financial technology companies continuing to exploit their agility edge over banks.
“Self-service is king. In a bid to increase efficiency, banks will continue to eliminate human interactions and work through the use of analytics, artificial intelligence and robotics. Technology can solve many problems—but only if processes are designed properly. They need to be digitized and re-designed with an end-to-end view of the customer and customer needs at the center of it all, which will require breaking down internal silos.”
—Scott Andrick, senior director and industry principal, financial services, Pegasystems
Two-sight foresight: Two-way video
“While it’s not new technology, two-way interactive video will finally come of age. Banks will increasingly centralize small business lenders, investment advisors and mortgage lenders in call centers that function as virtual branches. They will service customers in branches ‘on demand’ via video instead of riding circuit, [lenders assigned to groups of branches, with appointments to meet customers at various locations.
“We will start to see leading banks test two-way interactive video with customers from their home or phones for account servicing or account openings, bypassing the branch altogether.”
—David Kerstein, president, Peak Performance Consulting Group
Strike up the brand: Be a bank customers believe in
“Two of the most exciting and challenging developments for retail banking in 2017 will be efforts to increase transparency and right size the customer service approach.”
“Transparency is demanded more and more by all consumers, especially as the millennial generation had grown to the largest segment of our population. Research abounds that shows people aged 18 to 35 would rather do business with a brand they believe in. We expect this to translate into a renewed focus on transparency for banks, especially given the level of consumer distrust expressed toward the industry for many years.”
—Nicole Lorch, SVP of retail banking, First Internet Bank
The mastery of mystery: Eyes on the mystery shopper
“How can a bank protect both its reputation and its customers across its many physical locations and customer service representatives? The key is independent assessments of the advisory experience. Mystery shopping is a very effective tool to that end. Bank advisors have the most visible and front-line role in their direct interactions with customers.
“In our recently completed banking research, 20 percent of consumers said they had spoken with an advisor at a branch of their primary banking within the last 90 days. Evaluating those interactions according to the clear brand standards and policies of the bank is critical to ensure that ethical practices are being followed.
“Moreover, banks can assess how advisors are building trust to keep their loyal customer base. Trust is hugely important to bank customers and our research shows that less than half of consumers have complete trust in their primary bank.”
—Cheryl Flink, chief strategy officer, Market Force Information
Seamlessness: As crucial as it seems
“Over the past few years, we’ve seen a movement to omnichannel banking, with a focus on making the experience intuitive, efficient and incredibly convenient for the consumer. Developments in technology consistently elevate consumer expectations and change the way all banks do business. It will be exciting to see how this further drives banking innovation in 2017, shifting traditional bank offerings toward a seamless experience across all devices and consumer touch points.”
“The benefits won’t be just for consumers. Banks that embrace new technology approaches to consumer banking touch points will not only deliver dynamic banking experiences; they’ll also increase the efficiency and flow of back- office processes across the institution.”
—Michael Ball, vice president of markets and strategy, Integrated Media Management
The more individual the service, the better
“Consumers hunger for flexible, convenient services. And banks see value in ‘decomposing’ pre-packaged banking products into smaller, independent and itemized services. Customers can then assemble unique bundles of these services, tailored to their needs and context. Services could include account opening; account closing; payments; loans and cards, among others.
“Another important emphasis will be on designing rich, omnichannel user experiences with more points of contact with clients, who can initiate a transaction or a service in one channel and complete it in another, while having the same experience on any device or a branch. Each user will have their individual way of interacting with the banking services based on behavioral data, analyzed by AI systems and continuous customization powered by machine learning.”
—Andrii Mykhalniuk, solution architect, finance practice, DataArt, a global technology consulting firm
A ‘token’ effort: Better protection from data breaches
“The concept of ‘tokenization’ is really poised to take off. Now that so-called ‘card on file’ tokenization has started—with Netflix being the first merchant to implement it—we will likely see many more merchants become token issuers in the coming year. What this means is what when a customer adds their card to their account for a recurring payment or to save, the merchant is going to create a token for future use. And from a security perspective this is great news, as merchant breaches will become less and less impactful as merchants use tokenized credentials more and more.
“From a customer experience perspective, this also marks a giant leap forward. If or when credit card credentials are fraudulently obtained by a third party in some other situation—such as a breach at a merchant that doesn’t leverage tokenization—it removes the need for customers to go to each merchant they use and update their number, which is the case today.
“The token on file can be updated with the new underlying credentials without the customer needing to do anything. So it’s not just about security, but also an improved customer experience.”
—Matt Herren, product manager of payment analytics, Computer Services, Inc.
Caitlin Kelly, winner of a Canadian National Magazine Award for humor, is a frequent contributor to The New York Times. A former reporter for the Toronto’s Globe and Mail, Montreal Gazette and New York Daily News, she blogs about retail for Forbes and on her own site, Broadside.