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Oana Ifrim, Senior Editor, The Paypers
Industry View from
2020 is set to be defined by technological innovation, financial wellness and an elevated customer experience, says Oana Ifrim, senior editor at The Paypers.
The banking industry is experiencing a tremendous wave of innovation, with new technologies impacting legacy banking models and consumer expectations, changes in the way financial institutions engage with consumers across their financial lifecycle, and fintechs making banking customer-centric.
So what are some of the most important trends to watch in 2020?
2019 was sure to bring optimism and excitement to bigtechs. It was mostly about laying groundwork and was a year of growth. Apple announced a credit card created in partnership with Goldman Sachs. Facebook announced Facebook Pay, available on Messenger, Instagram, WhatsApp and Facebook itself. Uber announced a new division called Uber Money, which includes a digital wallet and upgraded debit and credit cards.
For 2020, Google plans to offer “smart checking” accounts to US customers in conjunction with Citigroup and the Stanford Federal Credit Union. Facebook, meanwhile, is continuing its plans to introduce its digital currency Libra, which is designed to make global payments cheaper and faster.
2020 brings a new generational priority: Generation Z customers.
Gen-Z customers have a new set of priorities and preferences. Born between 1996 and 2010, the generation expects digital experiences to be cool, awesome, and immersive. They are more interested in digital payments products, especially ones that offer multiple touch points and personalised interfaces.
Finding fresh niches, modernising the processes and exploring new digital avenues for communicating with customers are just some areas where banks can start. A number of fintechs are already rolling out mobile banking, credit apps and financial literacy tools that help Gen-Z to manage money and save for the future.
Customer expectations always include speed, convenience and transparency. Both end-consumers on one side, and banks on the other, are vehicles for innovation when it comes to real-time payments, as consumers demand that the products and services they interact with trigger a near-instantaneous response. A sure trend for this year will be a shift from real-time payments being a new trend, to being an expected element of the status quo.
Moreover, banks have a winning chance at this game only if they create competitive environments for real-time payments to strive in, adhering to such corporate policies and focusing on rejuvenating their systems so that instant payments cease to be primarily the preserve of neobanks and fintechs.
Services such as request to payment (RtP) are aimed at enriching the payments landscape. In the UK, Mastercard will launch its RtP solution, which enables consumers and businesses to receive payment requests and view bills and pay with real-time payments or card.
Moreover, EBA CLEARING has announced the development of pan-European request to payment infrastructure solution. Its delivery is supported and funded by 26 financial institutions from 11 countries, to go live in 2020.
With cyber-threats continuously evolving and becoming progressively more sophisticated, organisations are becoming increasingly aware of the threat of cyber-crimes and the importance of cyber-security.
Making sure the privacy and security of personal data is safeguarded continues to pose several challenges, considering that data breaches are almost daily news. In 2020, data breaches, a shortage in cyber-security talent and changes in data privacy regulations will remain top technology trends in banking.
Customer experience is a competitive driver of growth. Artificial intelligence (AI) can be helpful and deployed to deliver a better and more convenient customer experience, resulting in greater satisfaction and competitive differentiation.
In order to develop a successful customer experience strategy, you need to start by having a clear vision, then understand and relate to your customers. In this context, leveraging AI can help accelerate this in-depth level of comprehension of the market.
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