Author: Simon Cadbury
Switching, mobile banking and targeted services – financial providers can expect a year of change
For consumers, switching financial providers has never been easier, with the process only taking a week. Plus, 2014 saw even more “challenger” banks take on the big four. Competition is fierce.
2015 is therefore set to be an exciting year for financial services as providers do all they can to retain customers. In particular, a focus on fair products, innovative mobile banking security and targeted services will shake up the industry.
Rebuilding customer trust continues to be a top agenda item for the banking industry. There is no better way to do this than for banking providers to design and implement products that improve the financial well-being of their customers.
Last year, Intelligent Environments, having been accredited by The Fairbanking Foundation, challenged providers to make the necessary improvements to achieve a Fairbanking Mark by October 2015. The Fairbanking product set includes current accounts, regular savings products, credit cards and personal loans. In each case, the product is scored by how well it helps customers manage their money and achieve an enhanced sense of financial well-being.
We believe that the Fairbanking Foundation provides a proven and ready way for the industry as it shows the public it is changing its culture for the better and benefit customers. Several financial services institutions have already been accredited including RBS, NatWest, thinkmoney and Saffron Building Society. We hope many more will take up the challenge early in 2015.
Despite more people than ever using mobile banking, customer perception about security remains the number one barrier to further adoption.
This was heightened by a number of well published security flaws (e.g. Heartbleed) and data breaches (e.g. JP Morgan who had the details of 76m customer compromised) in 2014.
We believe the answer is to make the whole process of customer authentication more intuitive. We are doing this through progressive security – making authentication appropriate to the task in hand. For example, our latest feature, Quick Balance, can allow end users to turn on the ability to make a simple balance check without having to login. If they want to undertake a more involved transaction, such as making a payment, they need to pass more rigorous authentication.
The natural way to supplement this is via the introduction of biometrics.
Our research reveals fingerprint scanning technology is the favoured biometric security alternative to passwords for UK bank customers, with 52 per cent of respondents saying they would like banks to integrate fingerprint scanners into digital banking apps.
This makes Apple’s announcement last year that it is opening up Touch ID to third party developers even more significant for financial service providers as they look to improve mobile security in 2015.
With banks like Barclays also experimenting with voice verification, it will be interesting to see who takes advantage of Touch ID and other biometric methods to improve the balance between customer convenience and bank grade security.
Improved service through location data
Despite privacy concerns being raised, 2014 was a pivotal year for location data. Businesses are now using this information more than ever to improve their customer services. Our recent research reveals young people are happy to share their location data, as long as it is used by firms to provide a better service. For example, 60 per cent of 18-35 year olds say they would be happy for apps to use location data to send them exclusive location-specific offers.
These findings clearly highlight a huge opportunity for financial service providers, one which they will hopefully capitalise on in 2015. As well as sending location specific offers, banks can use location data to provide a highly personalised service.
iBeacons, Apple’s Bluetooth technology, determine a user’s location within a few meters and holds significant benefits for financial services providers. For example, they can be used to identify when a high-net worth customer enters a branch, or when a customer arrives to discuss a mortgage product, ensuring a tailored, relevant service as quickly as possible.
Last year, St George’s bank in Sydney announced it had begun trialling Beacon technology in branch as “part of a broader investment in retail branches to make banking simpler, easier and faster for customers”.
This year, we will hopefully see UK providers make the most of this information resource.
The challenge ahead
2015 will undoubtedly be a challenging year for financial service providers as they look to cater to their customers’ continuing evolving expectations. However, with exciting developments and new innovations to capitalise on, it will also be a highly exhilarating year and I am looking forward to helping our customers implement new solutions.