Posted by Nathan Marquiss on 23 Sep 2016
The rise of e-commerce in recent years has stemmed the introduction of innovative new technologies, and a globalized economy as a whole. Heather Cox, Citi FinTech CEO, once said that “Technology is eating the world.”, yet many banks and lenders continue to rely on traditional means of interaction with their customers. Much of that customer base consists of aging populations comfortable with traditional payment methods like checks and cash. Resistance to new technology, however, could alienate demographics that banks need for future growth and drive them towards emerging alternatives.
The electronic landscape continues to grow and change at an incredible rate. Smartphones and other technologies have created demand for instant information and service that is entrenched in a ‘bigger, better and faster’ mentality. Amazon began as the largest distributor of books in the United States but has since leveraged new technologies to transform into one of the world’s biggest retailers as a whole. Apple is the biggest distributor of music – also a digital product line. Much of the physical distribution and hands-on customer service models of traditional commerce are becoming obsolete. Ultimately, these demands are calling for more efficient means of communication and interaction leading to instant gratification.
The rise of digital payments is an example of this, though many financial institutions continue to offer outdated customer experiences. Even when banks offer new apps and mobile access points, decades-old technology often lies behind these interfaces, offering limited capacity to the new age consumer holding a modern mobile device. Many of these systems were developed long before the digital age we now live in, originally built for slower ‘branch-based’ interaction and overnight processing.
Financial institutions are not immune to the rapid evolution of consumer behavior. Consumers demand faster fulfillment, and the speed of change also continues to get faster. Banks have seen a steady decline in physical branch locations for years, and that trend will likely accelerate as consumers increasingly conduct financial activity through their smartphones, tablets, and other devices. This decline in physical interaction offers the banking world a unique opportunity to engage customers through new digital channels such as enhanced ATMs and interactive interfaces.
Doing more with less has been a cliché motto for years, and now banks can apply that same concept to how they conduct business with, and for, their customers. With an automated yet intelligent suite of digital enhancements, banks can offer customers services that save time and effort, as well as the flexibility to do things their own way whenever they want. A tailored Integrated Voice Response (IVR) system, for example, offers customers self-service options to conduct business anywhere. Digitally interactive apps and ATM screens can offer similar functionalities.
Fewer branches do not equate to fewer access points, nor does it mean fewer customers. Brett King once wrote, “The bank is no longer somewhere you go. Banking has become something you do.” New technology has changed how customers view their finances, and in many cases how they bank and manage money. Every aspect of e-commerce, payments, or banking can now be accessed from a central device that most consumers have in their pockets. Despite their reputations, financial institutions can still adapt to the changing times by making simple cost-effective improvements to their technology infrastructure.
The days of balancing a checkbook, now thought to be something your parents did, are quickly becoming a thing of the past. Technology is eating the world. Can’t wait to see what happens next.