The way people make payments is changing faster than any other area of financial services. Whether it’s that last Uber or Lyft ride, or the first trip to the Amazon Go store, your customers’ experiences in industries outside of financial services are driving new expectations when it comes to making payments.
Embracing Instant, Intelligent and Secure – the new payments normal – will require many financial service providers to drive a wholesale transformation of their payments strategy and customer experience.
Here are four strategic imperatives to consider:
1. Instant, Intelligent and Secure Payments are Data-Driven
Data impacts everything your business does – from acquiring profitable accounts and driving active use of your products/solutions to growing a sustainable portfolio revenue. By drawing on the vast data stores you (and partners, like FIS) have, you can educate your customers on how they spend, when they should save, or how to adjust their financial plan when major life changes – i.e., marriage, the birth of a child, retirement, etc. – take place. More than 50% of consumers recently surveyed by a leading consulting firm said that they would share personal information to receive personalized offers.
2. Communications are Connected across Channels and Devices
Customers are growing comfortable with using robots (bots), wearables and other AI-powered connected devices to enable their tokenized payments. FIS is looking at ways to allow your customers to connect to and analyze their data in real-time. Whether through online channels, an existing or new mobile app, or integration into various bots like Alexa, Google Home, Siri, etc., we are working on a range of potential use cases for these bots to enhance the overall consumer experience. And banking executives are on board, with nearly 80% recently surveyed saying artificial intelligence (AI) will revolutionize customer engagement through better data insight, improved productivity, and higher cost savings.
3. It’s Essential to Cultivate Loyalty at Every Touchpoint
Technology is fueling creative ways to deliver rewards by allowing cardholders to redeem in real-time, thus extending their purchasing power with rewards as currency. For that reason, the importance of rewards as a competitive differentiator has never been greater. Consumers not only want simplicity in earning rewards, they want easier ways to redeem these rewards. Nearly 70% of consumers want to redeem rewards as they swipe at the point-of-sale (POS) terminal.
At FIS, this perspective led us to create our Premium Payback solution, which delivers a surprise and delight experience for customers at checkout. It’s also why loyalty is at the center of our enterprise data strategy, which demands that we leverage AI and machine learning to elevate loyalty even further – from relevance to real-time, right-for-me recommendations.
4. Plan and Execute Digital First
Omnichannel capability is important to reduce friction in the way cardholders use your products and services, but investing in comprehensive digital capabilities is fundamental. Consider today’s teens and young adults, generation Z, who are projected to make up as much as 40% of US consumers by the year 2020, according to Accenture. This generation demands immediacy and highly personalized experiences more than any other generation before them. Almost 70% of these young adults use mobile banking apps daily, with 68% wanting instant P2P payments. On top of that, research is projecting that one in every two dollars spent on eCommerce will come from mobile devices in 2020.
It all points to the same thing: omnichannel is a necessity for everyone. Regardless of business or industry.
As a presenter at Money20/20 put it, we’re in a rapid transition from a payments industry built on cards and terminals to one that is dominated by phones and fobs.
Are you ready?