By Christopher Baldwin, Head of Marketing, Northern Europe, Selligent Marketing Cloud
Change is the only constant
The writing is on the wall for the retail banking sector. And it reads: Adapt or die! After digital disruption has brought landmark changes to industries such as retail (courtesy of Amazon), travel (Expedia), transportation (Uber) and hospitality (Airbnb), the time-honoured institution of banks is next in line to feel the heat. And the temperature is rising.
According to a recent McKinsey and Company study, the banking segment is currently experiencing an unprecedented paradigm shift – posing an urgent need to get with the (digital) programme. “Banks have three to five years at most to become digitally proficient. If they fail to take action, they risk entering a spiral of decline similar to laggards in other industries,” the McKinsey report concludes.
It’s safe to say that banks have seen their fair share of “laggards in other industries”; yesterday’s “too big to fail” companies that proved too slow to respond to change and have gone the way of extinction. And banks, out of all service providers, are well aware of the financial implications of being a laggard in the face of digital disruption. As the McKinsey report suggests, “digital laggards could see up to 35 percent of net profit eroded” over the next five years.
Meanwhile, there’s plenty of incentive for staying ahead of the curve, because McKinsey sees “winners” of digital disruption in the banking industry “realise a profit upside of 40 percent.” Contributing to this stunning number, a 10% profit increase is expected to come from new digital banking products, and the capacity for “using data to cross-sell” to increasingly demanding bank customers.
A changing playing field
The changing demands of today’s bank customers are adding fuel to the flames. Over the past three years, the number of people going into bank branches to do their banking has fallen by 30% in the UK according to a British Bankers’ Association (BBA) report.
Fortunately, these banking transactions aren’t disappearing – but going digital. And that’s good news, as banks can provide 24/7 service through their online presence, while building long-term relationships and harvesting data for profitable analytics and decision making.
Accordingly, the playing field is changing rapidly. Today, only about 10% of retail-banking revenue is considered “digitally disrupted,” meaning revenue captured via online or mobile channels. But by the end of 2018, disrupted revenue is forecast to be around 50% or more for banks in many major markets, including the UK, Scandinavia, and Western Europe, according to the McKinsey and Company study.
Revenue streams and financial transactions are increasingly moving to digital channels. This pushes traditional banks into the same arena as Web-native disrupters such as crowd-funding platforms (Kickstarter), digital payment systems (PayPal), and peer-to-peer credit lending (LendingClub). Not to forget alternative peer-to-peer currencies such as Bitcoin.
Armed with detailed customer intelligence, banks are already finding successful strategies by being more than just a bank for customers (particularly millennials), a lifelong partner who sees them as individuals, not just numbers. Using customer data as the fuel for a more personalised service offering, leading banks are seeing major success with the following trending strategies:
User-centred customer-journey design
Banks are adapting their data capture and user interface design to learn more about their customers – and roll out individualised customer journeys with full visibility of every step of the journey. This also builds trust: According to a NewsCred study, 66% of Millennial customers would trust a bank more that offers helpful, useful content.
Personalised service offerings based on data
Leveraging real-time customer data collected through digital channels, banks know at which point in time customers need investment advice, home mortgages, or retirement advice. Whether it’s at the bank branch or through mobile banking, financial institutions can provide appropriate products and services to suit personalised needs.
Relevant content and guidance
Understanding customers through data also allows banks to pepper personalised websites with interesting, relevant content. This is highly appreciated by young customers: According to NewsCred’s study, “The Trust Transaction,” 59% of 18 to 24-year-old customers would spend more time on their bank’s website if it provided interesting articles.
Engagement via apps and social media
A mobile-optimised website is the minimum for young customers, a mobile app is even better. Over 56% of 18 to 24-year-old customers in the NewsCred study liked to engage with their bank via apps, 50% via text message. In addition to this 25% of this age group engaged with their banks on Facebook, while 37% would share interesting articles from their bank on social media, nearly double the survey’s average response.
Support beyond banking
For young customers, relationships with banks go beyond financial services and hard numbers. The 18 to 24-year old respondents in the NewsCred study were 13% more interested in “non-finance-related content from their such as travel, careers, music and technology. Case in point is banking powerhouse ING, which has previously used this powerful lifestyle connection to win over young customers at summer music festivals.
The banking and financial services industries have traditionally been digital laggards, partly as a result of the highly regulated industry in which they operate and partly because senior decision makers have been slow to recognise the potential ROI. We are now entering a critical new phase in which intelligent machines are enabling – indeed, compelling – banks to fundamentally see and do everything differently. With the growing threat of FinTech firms increasingly gaining traction with consumers due to the accessibility, flexibility and availability of the financial products which they provide, banks now have a significant incentive to accelerate the move into the digital age.
U.S. inauguration turns poet Amanda Gorman into best seller
WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.
Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped Amazon.com’s sales list.
“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.
Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.
While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.
“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”
Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.
“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.
“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”
The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.
“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.
A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.
She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.
Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.
“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.
Gorman’s books are both due out in September.
Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.
(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
Why brands harnessing the power of digital are winning in this evolving business landscape
By Justin Pike, Founder and Chairman, MYPINPAD
Delivery of intuitive, secure, personalised, and frictionless user experiences has long been table stakes in digital commerce, well before the era of COVID-19. As businesses harness the revolutionary power of digital technologies, they have pursued large-scale change to adapt to evolving consumer preferences (some more successfully than others, but that’s a blog for another day). Digital transformation is a term we hear repeatedly, and it looks different for each organisation, but essentially, it’s about utilising technology and data to digitise, automate, innovate and improve processes and the customer experience across the entire business.
As I said, this was already well underway but then came 2020 and no industry escaped the disruption of the coronavirus outbreak, which has had an indelible impact on businesses performance, operations, and revenue. Regardless of whether the impact of COVID has been very positive or very challenging, it has forced organisations globally to re-evaluate and re-orient strategies to adapt.
As lockdowns and pandemic-related restrictions continue to change daily life, this raises the question of how we can balance a dramatic shift to digital and the benefits it brings, while ensuring business continuity and innovation both during and post-COVID, and protecting everyone against fraud?
Digital is an essential survival tool, and even more so in a COVID world
No one could have predicted the dramatic digital pivot that has taken place over this year. Indeed, within weeks of the COVID outbreak cash usage in the UK dropped by around 50%. Digital solutions including delivery applications, contactless payments, mobile commerce, online and mobile banking have become essential components of a touchless customer experience in the era of social distancing. It’s no longer just about an enhanced and superior customer experience, it’s also about health, safety and survival.
In store, businesses have benefited from contactless payments enabling faster throughput and reduced need for consumers to touch payment terminals (therefore requiring greater cleaning, which degrades the hardware much faster). Mastercard reported a 40% increase in contactless payments – including tap-to-pay and mobile pay – during the first quarter of the year as the global pandemic worsened. Digital has also become an essential sales channel for many B2C brands. Where brick and mortar stores have been required to close, digital commerce enables continuity of customer relationships and revenue. This channel also provides brands with rich customer data, which can be used to enhance and personalise the customer experience and typically results in greater levels of engagement and uplifts in revenue.
Industry forecasts estimate that worldwide spending on the technologies and services enabling digital transformation will reach GBP 1.8 trillion in 2023 – a clear indication that the process represents a long-term investment and a global commitment to digital-first strategy. The key point here is that digital brings significant benefits, and regardless of COVID, is here to stay.
The challenges that rapid digital transformation brings to businesses
Regardless of whether businesses are operating in developed or less-developed economies, these times of crisis have levelled the playing field in the sense that all businesses are facing similar issues. Access to products and supplies, maintaining customer relationships, accelerating sales for some and declining sales for others, health and hygiene are just a few of the unique challenges brought about by COVID.
Many businesses in physical environments have had to swiftly implement changes to significantly reduce safety risks for staff and customers, such as contactless payments, mobile ordering and delivery options. But with these changes come a host of other benefits of digitisation, such as faster transactions, and reduced human error at the point-of-sale.
The reliance on technology, however, can also expose organisations and consumers to certain vulnerabilities. In particular, the risks of fraud and cybercrime have dramatically increased since the onset of the pandemic as scammers have taken advantage of digital technologies to target both businesses and individuals.
As a McKinsey report illustrates, new levels of sophistication in the activities of fraudsters have placed more pressure on companies that have been previously slow to go digital, bringing “into sharp relief how vulnerable companies really are”, and damaging the financial health of small and large businesses. In fact, the Bottomline 2020 Business Payments Barometer reveals that only one in 10 small businesses across the UK report recovering more than 50% of losses due to fraud.
But take these stats with a grain of salt. While it is important to be aware of the risks and challenges this new business landscape brings, it’s equally as important to have a lens firmly across your own business, industry and audience, and to identify the changes you can make internally to mitigate risk as well as improve your customer experience. Where can you make some quick wins? Do you have the right skillsets internally to achieve what you need to achieve? What technology is out there that will enable your business goals? There are tech companies like MYPINPAD that are making huge strides in software development, which will transform businesses globally.
A digital world post-COVID
Almost a year in, the line between business success and failure remains fragile. However, an ongoing transition towards greater digitisation will be the difference between survival and the alternative.
There is a wide range of initiatives businesses can implement to weather this storm. If we look at the space MYPINPAD operates within, secure digital consumer authentication is crucial to the ongoing success and security of not only financial products but also identification and verification across a range of different industry verticals. Shifting the authentication of consumers securely onto mobile devices enables businesses to completely reshape their customer experiences. By bringing together a more seamless, frictionless customer experience, accessibility, privacy, security and access to consumer data, businesses are able to drive digital transformation across day-to-day activities.
Against this backdrop, software with stronger security standards continue to play an ever more vital role in supporting society, protecting consumers and businesses from the increase in risks that rapid digitisation brings. Already, merchants can deploy PIN on Mobile technology from companies like MYPINPAD, onto their smart devices to speed up the digitisation process many are now tackling.
Essentially, opening up universal payments and authentication methods that feel familiar, for both online and face-to-face transactions, will be key to opening up a world of possibilities when it comes to redefining how businesses engage with consumers.
Brexit responsible for food supply problems in Northern Ireland, Ireland says
LONDON (Reuters) – Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.
British ministers have sought to play down the disruption of Brexit in recent days.
“The supermarket shelves were full before Christmas and there are some issues now in terms of supply chains and so that’s clearly a Brexit issue,” Coveney told ITV.
The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.
(Reporting by Guy Faulconbridge; Editing by Tom Hogue)
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