While working on a recent project for a client in the banking sector, we researched various trends and ideas about the future of banking and payments. That’s what I will try to share with you below.
The factors and user needs that are driving change in the banking sector are as follows:
So how have these factors impacted on the world of digital payments and online banking?
How many times have you felt disappointment at your local store for not accepting card payments or applying a charge to transactions on payments under a certain amount? Targeting mostly small merchants who can’t offer card payments because of hardware and IT costs, start-ups have turned tablets and smartphones into card processors. All you need is an app and a small card reader which is attached to the phone. However, is this approach really worth the pain - can business with small merchants be profitable? Rumour has it that Visa have invested in Square, an innovative start-up in this domain. Some big banks, like Santander and Lloyds, are also supporting similar projects. Who’s already doing it?
Utilising NFC and other technologies, digital wallets are another form of mobile payments.
Searching for bank details every time you want to set up or accept an online payment is tiresome. Some debit cards don't even have sort codes on them! Soon, however, you might only need to know the recipient’s email address or mobile number. Who’s already doing it?
Would you follow a bank on Facebook or Twitter? You might if their posts were relevant to your interests. A few banks have succeeded in creating a content strategy for their social networks to engage and grow their following. For example, BBVA and Barclays gained thousands of followers by posting about football. In between football updates, they also tweeted about their product and services. Following financial institutions on social networks is one thing but how about accessing your account balance through Facebook and even sending money to your friends? Facebook banking apps allow you to utilise the capabilities of web banking without having to leave your beloved(!) profile. Facebook even guaranteed they won’t have access to your financial data... Who’s already doing it?
If you want to be fancy in the financial sector nowadays you have to offer tools that help your customers manage their finances in a smarter way. Again, start-ups are leaders in this domain and offer alternatives which are commonly superior to those of traditional financial institutions. Here’s what personal financial management (PFM) tools offer:
Who’s already doing it?
Some of these services might sound a bit extraordinary or risky (like logging in and banking through Facebook…). The truth is that there isn't accurate data out there to validate the success or failure of these services. Time will tell.
If you want to keep up-to-date with financial tech news, here are some informative resources I have subscribed to: