As cash and cards give way to mobile, banks need consumers’ trust even more
A new generation of bank customers is bypassing physical branches and banking via the web almost entirely in favor of completing transactions and accessing services from their mobile devices.
The same goes for payments — mobile wallets, peer-to-peer payments apps and social media payments have taken the payments industry by storm.
Research shows that the ratio of payments to other banking interactions is more than 10 to 1. That means that how their customers pay is of great interest, and possibly concern, to banks. If the bank isn’t involved in a customer’s payment activities, it’s impossible to know what the customer spends money on and probably will spend on in future.
A bank that is unable to reliably predict its customers’ needs and meet these with specific revenue-generating products like loans, mortgages and investment instruments, will have trouble surviving in this fast-changing world. Maintaining issuer loyalty is also increasingly hard when the bank or its cards is only one of a range of options that customers can use to meet their financial needs.
Financial institutions ready for the future of banking and payments are realizing the importance of becoming the center of their customers’ financial lives again — a position many banks have had to give up, especially in the case of younger customers. They are realizing that there is a great opportunity for them to re-establish relationships with their customers at the point of payment.
Whether in a physical store or an online environment, points of payment are becoming increasingly dependent on mobile devices and third-party apps. Consumers are no longer interested in merely completing transactions. Instead, they want engagements. They want to have a range of capabilities at their fingertips. They want convenience, speed and security.
It is possible for a bank to give customers everything they want. The bank can ensure that wherever its customers go, whatever they do, whatever payment opportunity they’re presented with, the bank will be at their side to make sure they can engage in all of their financial interactions securely and with confidence. Leveraging the trust relationship the bank already enjoys with its customers, based on robust security, engagements can go beyond run-of-the-mill transactions. Integrating customers’ loyalty programs, allowing them to authorize sensitive payments securely, sending secure notifications with strategic advice — the banking app can become the center of customers’ financial lives.
This way, in a cashless, cardless society, no one will wonder where the banks are. They’ll be everywhere they’re needed.
Sherif Samy
Sherif Samy is senior vice president of North America at Entersekt.