THE YEAR OF CHANGE – Top predictions for the financial services industry in 2014
– by David Webber
With James Bond style technology, personalised banking services and the world’s first smartwatch bank all set to revolutionise the way consumers manage their money, 2014 will be an exciting year for the financial services industry. David Webber, MD of Intelligent Environments outlines the key trends for digital banking.
The 1997 Bond film, Tomorrow Never Dies, saw Pierce Brosnanusing a mobile handset equipped with, what was at the time, an unfathomably futuristic security feature: a fingerprint scanner. Now however, after the launch of the latest iPhone 5S, the technology is becoming commonplace. Given that more than a quarter (27%) of Brits avoid using digital banking altogether due to the hassle of using a pin sentry or card reader, this can only be a good thing for digital banking. It makes it quicker, easier and more secure to manage finances while on the move and it gives banking providers the opportunity to boost customer service on an increasingly important banking channel.
As more mobile device manufacturers begin to follow suit and integrate biometric authentication into smartphones and wearable technology, savvy banking providers will look at ways to integrate this new security feature into digital banking apps.
With Google Glass on general salelater this year, an array of smartwatch launches planned and curved displays offering the potential for innovative product development, it is no wonder that 2014 is already being dubbed “the year of wearables”.
But what does this mean for digital banking? We recently conducted some research that found one in six (16%) consumers are already interested in using wearable technology to manage their finances, without even seeing or testing a working prototype. This rises to a quarter (25%) for 18 to 24 year olds. Financial institutions are keen to capitalise on the growing consumer appetite to bank on the move, so extending digital banking services to wearables is therefore an important aspect.
This is why we’ve developed the world’s first smartwatch banking app for the Pebble watch, which can display your finances at the glance of a wrist. Not only does it enable users to view their live bank balance and recent transactions, but it also vibrates when the user approaches their overdraft limit. We’re already having discussions with banks as to how wearables can feature in their 2014 strategy so I see this as a real growth area as more smartwatches and wearable devices enter the market.
Finally, we can also look forward to greater personalisation in 2014. Asthe European Union cuts card transaction fees, rendering reward schemes unviable, we will see an increase in collaboration between financial services organisations and retailers. This will create a wealth of spend datawhich can then be used to target customers more effectively with personalised offers, which according to Gartner, can be broken down into four elements: “see me, sync me, know me and be me”.These elements can be interpreted for financial services.
“See me” refers to retailers and financial services organisations collaborating to send personalised location-aware push notifications to customers. For example, a customer with an American Express card and the app installed on their smartphone will be alerted to cashback offers.“Sync me” means a customer’s financial information will be securely synced across all their devices, while “know me” will see big data used to predict which products or services customers want before they’ve even thought about it.The final pillar, “be me” will involve customers allowing banks to manage their money for them. For example, the bank will assess a customer’s regular financial commitments and give a prediction on how much they have left to spend before the next pay day.
The year ahead
From smartwatch money management, to biometric security, to personalised offers, 2014 will without a doubt be an innovative year for digital banking. There is a huge opportunity for banks to improve the experience for their customers. I therefore look forward to helping financial institutions capitalise on this new era of innovation.