Digital banking's overarching trend in the coming year is to get as close as possible to perfecting the consumer experience. Making that experience seamless, secure and hassle-free will build digital trust that's worth its weight in gold in terms of driving deeper consumer engagement and loyalty.
That's a theme our CEO, Jeff Yabuki, highlighted in his recent blog on the undeniable trends in banking. In some ways, digital banking has been driving those broader trends, and the anywhere, anytime world we live in means the driving principles of change in one space often intersect with those in another.
There are a variety of innovations – voice banking, facial recognition and other biometric capabilities, for example – that can make the digital experience as seamless as possible. Those developments stem from the bedrock fact that people just want to move and manage their money whenever and however it's most convenient for them. They expect the branch experience to be an extension of their online and mobile interactions, and vice versa. They expect their financial institution to earn their trust at every touch point.
There are many ways in which institutions will try to meet those expectations, enhance the consumer experience and build digital trust in 2018. Here are three trends to watch:
This is the year I expect to see financial institutions take a definitive step toward the Amazon model and use analytics to customize the consumer experience. All of the tools are in place for institutions to translate their vast amounts of transactional data into actionable information.
Think about interactions with Amazon. People visit the site, and it recommends a product. That recommendation is based on previously purchased products, reviews people have read and searches they have done on the site.
Now transpose that experience over a financial services model. The financial institution, for instance, knows a consumer has checking and savings accounts. Analytics also can show, for instance, a consumer recently bought a house and looked into an IRA. Recommendations and advice can be served up in session for that consumer based on life events and analytics.
The motivation is there to get it done this year. Delivering more value to consumers by providing more intuitive services ultimately deepens consumer engagement and makes them that much more loyal.
Financial institutions this year will take steps toward enabling consumers to customize their own digital banking experiences. In that sense, this trend and the one above represent opposite sides of the same coin.
Consumers want the flexibility to develop more customized relationships with their financial institutions. They want everything to work, and work together. They expect to be able to consolidate all of their accounts – PayPal, a utility bill, their credit card, to name a few – in one spot and have all of them connected to their financial institution. That's how digital banking becomes a truly seamless experience, both visually on the homepage within the financial institution and practically in the sense that consumers can accomplish all of their banking from one centralized dashboard.
Is the industry at that point? It's getting there, and I think there will be significant advances in the next year in terms of open banking through APIs. We're seeing partnerships forming between financial institutions and fintechs to allow for those customized relationships in banking, payments and lending. Equally important, we're seeing the focus on security advance in lockstep with those partnerships to maintain and strengthen digital trust.
Certainly, the focus on person-to-person payments (P2P) will continue into the next year, particularly with the broader adoption that appears imminent with Zelle®. That common network and platform across many of the world's largest institutions gives people the frictionless, secure experience they expect.
I expect the momentum in P2P in 2018 will inevitably lead to more consumer demand and provider innovation in the business-to-business (B2B) and business-to-consumer (B2C) payments spaces. A more holistic approach to enhancing payment capabilities overall means making B2B faster and building on B2C enhancements such as digital disbursements.
Seizing those opportunities can create a more seamless experience for consumers and business clients. That, in turn, enhances financial institution engagement and relationship-building.
The consumer experience is at the heart of every upcoming trend in digital banking. That may mean focusing time, energy and investment on creating an engaging experience that spans the entire financial institution.