Author: David Webber
KPMG’s head of payments, Mike Hale, delivered a fantastic speech – The Future of Digital Payments: eCommerce mobile wallets and regulation – at a recent Westminster eForum, in which he called on the payments industry to ‘delight’ its customers by delivering new solutions that fit the way they live at home, at work, and on the move.
He made it clear to all that it was vital, not only to the payments sector but also to the wider UK economy, that existing payments instruments, infrastructure, and business models are not simply rehashed, but instead that the industry must work to drive innovation in the way payments are approached and conducted. This could include looking towards new entrants to the space to facilitate and foster ideas that are potentially disruptive to current practice, and providing far greater accessibility to the market.
Wise words indeed, but it’s not just independent payments bodies and associations that should heed his suggestions. Banks are under more pressure than ever before to deliver on the innovation front, and cross-channel digital banking solutions are no longer simply a ‘value added’ or ‘nice to have’ offering – they are increasingly playing a major part in customer satisfaction and retention.
Digital banking has become a lynchpin of customer loyalty. According to new survey statistics from YouGov, over half (51 per cent) of Britons admit that having an effective digital banking service is a key driving factor in loyalty towards their bank. It’s an impressive figure that highlights just how much banks need to focus on ensuring that their digital solutions meet their customers’ increasingly high expectations.
Nowhere are these expectations greater than in the 18 to 24 age group. According to YouGov, 20 per cent of Britons in this age group have experienced frustrations with their digital banking solutions in the last 12 months. The same number expressed disappointment that their current bank services were not tailored to their individual needs.
Interestingly, 20 per cent of 18-24 year olds perceived supermarkets to offer a well ‘integrated’ digital service across all channels, suggesting that the retail sector (a non-traditional entrant to the banking sector) may be best placed to attract attention from these ‘Generation Y bankers’.
Innovation, as Hale points out, is at the heart of driving the digital banking offerings that the survey statistics reveal to be so important. As new players (e.g. retailers) enter their territory and continue to gain the trust of consumers, banks need to think on their feet more than ever before. These statistics reveal just how important digital banking is, and how vital these solutions, whether mobile, in-branch or online, will become to a bank’s reputation – and ultimately to its competitiveness in the years to come.
It’s no longer good enough to simply roll out a digital banking solution with the assumption that it is what the customer wants. Banks need to ensure that they understand their customers and what they want from a digital solution, making their banking (which is so often on the move) easier all the time. To be successful, banks that want to make an impact in the digital finance arena must seek to deliver features that customers did not even realise were possible, across multiple digital channels, in line with their digital lives.
They need to be able to look into the future and predict, or, even better, define what their customers will want in the coming years. A market loves a leader, and the sooner that a bank steps forward and truly demonstrates its commitment to innovation and customer experience, the greater chance that bank will have of cementing its place as a financial services provider of the future.