The new way of banking

Convenience is a priority for consumers whether you want it to be or not. Other things matter of course - like security, compliance, and quality of service - but convenience is not a variable to push aside. Let’s take a look at why…

Convenience is all around us

The launch of AmazonGo is a very real response to the increased weight consumers are placing on speed and convenience. The checkout-free shopping experience is a product of sharp advancements in technology and deep learning, just like driverless cars are, initiated as a response to increased demand from users.

We have seen it happening for years, from the introduction of wireless headphones, to remote keyless systems – these are very visible reactions to increasing demand, and the underlying trend is obvious.

It’s easy as 1, 2, Pay

Payments and banking is a huge area affected by this and the innovation in this space in recent years has been monumental. Since the launch of contactless and mobile payments, the concept of rummaging to find your wallet in your bag, or remembering a pin for small purchases seems a world away.

While the introduction of contactless payments answered the desire for quick and easy payments, it also raised concerns from consumers who felt as though they lacked control and awareness of how they were spending… enter Monzo.

Challenger bank Monzo aims to give consumers a more informed way of keeping track of their money without adding any additional steps to the payment process by providing tracking features showing spend across location, merchant, category etc.

Encouraging innovation

The Payment Services Directive (PSD2) has effectively come into force for all EU member states this year, and will likely make way for much more companies like Monzo.

The regulations encourage competition and innovation by enabling open banking – giving third party non-banking companies the ability to access consumer data from banks and perform payment services.

This change could be revolutionary for the banking industry, and we could see challenger banks and fintechs overtake slower-to-react rivals.

Adapt or fail

We have effectively reached a point of no return. As consumers demand more convenience and ease of use, and technology adapts, the demand and expectations increase, requiring technology to adapt even further in response.

We have seen so many businesses fail because of a refusal to innovate (or maybe they considered the upwards trend to be a non-important hype and felt secure as they were – Blockbuster and Blackberry to name a couple…) and many established institutions risk falling behind while pioneers in innovation take the lead.

Don’t let security slip

With the value placed on convenience sky-rocketing, it is vital not to ignore security. The demand for speedy processes present new challenges in identity verification and fraud detection so there must be a careful balance in place to address both.

Thankfully the aforementioned advancements in technology mean that we no longer need lengthy verification processes and, with the right solution, it is possible to smooth out the user journey and effectively verify identity in one.

Traditional verification processes still in place at most financial institutions are a bug bear for most consumers, and in too many cases lead to individuals unable to open accounts, borrow money, or set up payments. Currently there are 2 billion people worldwide who do not have a bank account or access to a financial institution.

Even for those individuals who do have the required credit history, the concept of having to scan a recent utility bill or bank statement can prove enough to abandon the process and look for alternatives. Our most recent research found that 66% of consumers would be likely to leave a site or abandon a purchase if asked to verify their identity by providing a scan of a recent utility bill*. While in the past alternatives to traditional banking did not exist, growth and development in fintech means that if they can’t get it from you easily, there are other options. Consumers have endless choices and to stay afloat you need to do all you can to get them to choose you.

It’s time to consider what you can do to be a leader rather than a follower and explore alternative methods that use advanced technology to overcome the obstacles of convenience and security.

Our big data analytics solutions derive insight in real-time on point of connection to pre-fill application forms and effectively verify the identity of consumers even with little-to-no traditional data, increasing inclusion while reducing fraud and speeding up the process. If you want to discuss how this can benefit your business or even just have an exploratory chat about embracing innovation, don’t hesitate to get in touch.

*All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2,012 adults. Fieldwork was undertaken between 12th - 15th January 2018.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).


Author James Blake