By Paul Heywood, Managing Director and VP of EMEA, Dyn
Cashless payments are undoubtedly growing in popularity. In August this year, 89 million contactless transactions were made – representing growth over the year of 235.9% and more than £633 million was spent using the technology. With such growth in popularity, it was not all that surprising to learn that cashless payments have overtaken notes and coins as the UK’s preferred form of payment. The launch of Apple Pay this year will, too, have a significant impact on these figures, signalling that an entirely cashless economy will soon be upon us.
But, in this cashless economy, are merchants and financial organisations readily prepared to support electronic payments and services through the digital supply chain? There is already an increased dependency on digital assets from websites, mobile apps and connected devices. Simultaneously, advancements in cloud and content distribution technology have allowed organisations to support the growing digital economy. Every digitally-connected business faces the challenge of ensuring their Internet Performance is consistent across all platforms and borders.
Any organisation looking to provide an exceptional end-user experience across their digital properties will ensure a well-executed technology strategy is in place. However, not all are aware that Internet Performance plays a vital role in this. Internet Performance bolsters the entire digital process ensuring that, regardless of demand, time or physical location, all transactions and updates reliant on the public Internet work properly. It supports the business’ ability to monitor, control and optimise online infrastructures. In this way, organisations can guarantee that their online solutions will be consistently available, efficient and secure – even across complex, distributed cloud/IT infrastructure deployments.
An ounce of performance is worth pounds of promises
Internet Performance can be defined as meeting customer demands and expectations through secure, fast, reliable and efficient assets delivered via the web. Traffic spikes have a reputation for slowing and possibly crashing websites or access to important data. Whilst the issue may lie outside an organisation’s own network, if it affects performance it ultimately affects revenue and brand reputation – something the financial sector cannot afford to compromise. If banks and merchants’ digital services suffer downtime or delays for whatever reason, both businesses and consumers will not hesitate to move their business to another organisation. To mitigate this risk, organisations need to have a strategy in place for load balancing and failover in the cloud.
Security is another priority we should turn our attention to. A YouGov study carried out earlier this year found that nearly of consumers (47%) would not use their phone to make payments, with 81% citing concerns over security being their main reason for not doing so. Of course, you only have to read the news to see why consumers have these reservations – data theft and cybercrime is rife and banks are very much aware of this. Data can be hijacked and delivered incorrectly when it is misrouted through the improper Domain Name System (DNS). This can result in a DDoS attack (which can either be malicious or accidental) where the source is more than one – and often thousands – of unique IP addresses. Alerting organisations of performance issues as soon as they happen will be crucial for mitigating potential risks and allow organisations to take effective, reactive measures to remedy any issues.
Meeting customer expectations
Delivering a consistent and efficient end-user experience is essential to completing transactions rapidly and reliable – and thus, maintaining customer loyalty and satisfaction. Whether a customer connects to online financial services through a web browser or mobile app, few are aware that the content displayed and transmitted is from multiple locations, including data centres, CDNs and cloud providers, which can often be hosted in different locations around the world. Customers expect a predictable and simple user experience, so if they cannot depend on consistency across their banking experience, they will abandon the app or service. Here, controlling traffic via the DNS layer can ensure the best response times so that customers receive the same experience, regardless of their location.
Scale does not necessarily lead to Internet Performance issues and high latencies if the right precautions are made. Financial organisations need to plan for the best cloud, datacentres and CDN hosting vendors based on their target customer locations. Vendors’ services may vary in speed, access to routing tables and the ability to securely deliver data to its intended target. Some Internet intelligence tools can objectively analyse this information, so companies can optimise their digital assets so that their customers receive the best online experience possible.
The bottom line
The Payments Council predicts that by 2024, just 34% of consumer payments will be paid in cash. Therefore, the risk of digital banking suffering downtime or delays needs to be completely eliminated as there will be fewer alternative payment methods to rely on. Never before has it been so important for financial services organisations to monitor and control their cloud providers, CDNs and datacentres as part of their Internet Performance monitoring. If Internet Performance is not a priority, banks and merchants risk losing out on reliability, reputation and trust—factors that keep valuable customers returning.
Beyond the bottom line: why brands must show they care to connect with customers
By Vadim Grigoryan, Partner, Lunu
Over the past few years, we’ve witnessed an ever-growing activism among consumers, with public opinion demanding that their concerns be heard and addressed. No industry has experienced this more than the retail sector, with brands regularly slammed by NGS or consumer-led initiatives for violating legal requirements or moral principles. Moving one step further in the experience economy, brands are not only required to provide a first-rate customer experience, but also a conscience. The product must be good quality, as should the experience of purchasing it. But now on top of that, consumers should feel positive about where they’re spending their money. This is particularly true in the crypto community, with cryptocurrencies regularly pointed out as too speculative as a product, or to energy-intensive. Is this really a surprise coming from a generation whose top concerns are collective ones such as the environment and global warming? The answer is a straight no! Brands have to face this new reality and embrace it accordingly.
This next step in the experience economy, that can be called conscious consumerism, provides an opportunity for brands to reinvent themselves and bring to the top of their agenda something that has so long been kept at the bottom, or on the side. Brands need to stand for something bigger than themselves. If they fail to do so, they will also fail to make an impact in the consumer’s mind, ultimately disappearing as a brand altogether.
- From the experience to the conscious consumerism. Today’s economy is as much about giving people the opportunity to feel good while purchasing the product or service, as it is about the feeling after the purchase. Environmental, social, and moral concerns are increasingly at the top of consumers’ minds and on the front pages. Brands need to realise this and adapt, but also accept this as an opportunity rather than a constraint. Profitability isn’t the number one priority anymore and they now have the chance to fully develop their CSR programmes without facing many of the internal/external constraints they would traditionally have faced.
- Having a meaning actually means something. Modern brands have to stand for something and if they do, they will also stand out in the consumer’s mind. Your brand won’t just be a jewellery maker anymore – it will be one that aims to make diamonds cleanly and ethically by creating them in a lab instead of digging them out from thousands of meters below the ground. Standing for something will also give you a voice and help you break through the noise, reaching out to ever more consumers.
- Having a purpose provides a valid reason to exist. By this we mean existing in the customer’s mind, as well as in stores and shops – because the truth is, both are now linked. To truly connect with your customers, brands need to go beyond their bottom line. They also need to show that this bottom line serves a purpose and isn’t a finality. Don’t be scared to embrace a cause if you want to keep a place in consumers’ hearts and minds.
The largest event in e-commerce history? ‘Tis the season
By James Booth, VP Head of Partnerships for EMEA, at PPRO
Sometimes, change happens slowly. Other times it chases you down like that boulder at the beginning of Indiana Jones. In 2020, change is fully in boulder mode. And the holiday season is when it either catches up with you or you leap triumphantly from the temple entrance, golden statue in hand.
The shopping season kicks off on 11 November, with the 11.11 Global Shopping Holiday (formerly Singles’ Day). According to analysts, Alibaba and its merchants are on track to rack up $45 billion worth of sales on Singles Day alone , up from $38 billion last year . And if last year’s results are anything to go by, a large proportion of those sales will go to non-Chinese companies. Last year brands such as Bose, Estée Lauder, Gap, Levi’s, Nike, The North Face and Apple all made over 1 billion yuan ($143 million) on Singles’ Day .
Increasingly, US and European consumers are also participating in Singles’ Day. However, both markets shift into proper holiday mode with Black Friday on 27 November. And there is every indication that this, too, will be bigger in 2020 than ever before.
Adobe Marketing Insights predicts a 20% increase in e-commerce spend over the Black Friday to Cyber Monday weekend . Looking at the holiday season as a whole, Deloitte forecasts that seasonal e-commerce — online spending is expected to grow by up to 35%, compared with just 14% last year .
But that doesn’t mean you can just relax and wait for the holiday season sales to rack up. As well as driving customers online, lockdown has also disrupted brand loyalties. During lockdown more than two-thirds of customers in some markets have tried a new product or service and of these, a quarter do not plan to return to their old habits once lockdown has ended .
Old shopping loyalties have been upended, and that means their holiday-season shopping is up for grabs.
For instance, 43% of over-65s are now shopping online compared to just 16% before lockdown . For online merchants the grandparent present budget just became accessible. But to win your share of it, you have to provide a customer experience that this demographic will love.
Making the checkout page a priority
The question then, is how to prepare your merchants’ or your own e-commerce site for the holiday shopping season. It’s only a few weeks until Black Friday, so there’s no time to lose. You need to find out where gaps are in your customer journey, and plug them, before those customers run away to someone else.
The customer experience at checkout is particularly crucial. One of the surest ways to lose customer trust at the checkout, is by not offering shoppers’ preferred payment methods. According to research by PPRO, up to 50% of customers have abandoned a transaction because the merchant did not offer their preferred payment method .
It’s a question of localisation. Except in this case, you’re not necessarily localising for customers in a particular geography. Instead, you might consider localising for consumers in a particular age group who are now shopping online for the first time. Or customers from a range of demographics who have never shopped online for a particular category.
No one size fits all when it comes to global payment preferences
If you want to succeed in global e-commerce, you must offer the preferred payment methods for every market and demographic you want to win over.
Worldwide, consumers use alternative or local payment methods in more than 70% of all consumer transactions . These are the payment methods whole markets and demographics grew up with online and trust. Fail to offer them and you can have the best possible customer journey, but you’ll still lose basket after basket at the checkout.
With the acceleration of e-commerce and the influx of online competition, anyone who hasn’t optimised their payments offering will be desperately racing to catch up. Merchants need to think now about how they are going to maximise their revenue from what looks to be the biggest online holiday season ever. And payments is a crucial part of that conversation.
9. Original PPRO research.
Why insurance needs Tesla’s autopilot too
By Christian Wiens, CEO of Getsafe
Digitization is the industrial revolution of the 21st century. What does this mean for a data-driven industry like insurance? The answer is simple: Turn everything on its head and reinvent yourself under high pressure- the future of insurance is digital.
“Hello Timo, nice to see you. I’ll be glad to help you.” Carla records claims 24 hours a day, seven days a week and takes less than two minutes to evaluate and process them. Carla works for a digital insurer and is a chatbot by profession. While she is answering Timo, she contacts the bank in the background, which pays Timo back his money – the same day. This is not a dream, but already reality.
In the digital age, intelligent machines are the new workers on the assembly line, and data is the new raw material. This applies to almost all industries and applies in particular to the insurance world as insurance is based on mathematical models and probability calculations – in short: on data. The more data on which the calculations are based, the easier it is to derive and price risk profiles. Data therefore changes the core of the product “insurance” in three essential areas; the offer phase, in the event of a claim and in the long-term customer relationship.
In the offer phase, we will experience long-term personalized product bundles that fit customer needs much better – away from standardized and inflexible policies. If the insurer can better assess the needs of the customer on the basis of his past history or behaviour, he is in a position to put together tailor-made insurance packages.
For example, it would be conceivable to automatically adjust the insurance cover as soon as the customer’s life changes, for example if the customer gets married, buys a car or a property or travels abroad.
Customer experience in the event of a claim will also change dramatically. Fraud is still the biggest problem in the system, with 2 percent of the customer base causing 40 percent of the system’s inefficiency. According to estimates by the Association of British Insurers (ABI), one insurance fraud is detected every minute – amounting to economic losses of £3bn every year. Of the estimated worth of total fraud cases a year, £2bn goes undetected.
But what if insurers are better able to assess customers on the basis of data and know which customers they can trust – and which not? Credible customers could then benefit from immediate payment of the loss incurred, while the few “black sheep” would not even be accepted as customers or would be checked more closely in the event of a claim being reported.
The computer does not act uncontrolled, but within certain parameters defined by humans. This is comparable to processes in the manufacturing industry: Here, too, people define the exact parameters that are to be checked – controls are implemented by machines that are significantly less prone to errors. The situation is similar when it comes to insurance fraud: people make value judgements and specify which indicators can point to a case of fraud. They retain sovereignty over the entire process. The smart algorithm, on the other hand, is only the tool for evaluating and linking the many individual data points. Smart algorithms will reduce employees’ workload, but will not replace them.
Finally, digitization will also change the long-term relationship between insurer and insured. Tomorrow’s insurance will not only settle claims, it could even prevent them arising. A better database will not only make it possible to calculate the probability and amount of loss more precisely, it will also make it easier to calculate the risk of loss. Digital systems and sensors can also help prevent possible claims. Telematic tariffs in motor vehicle insurance are already moving in this direction by promoting a prudent driving style.
Sensors on washing machines and industrial plants or intelligent smoke detectors are one thing – monitoring people in the health sector is another. Some health insurers reward sport activities, for example, if the customer can prove this with smart fitness watches. It remains to be seen to what extent customers are willing to exchange this personal data for premium refunds. In the long term, the legislator will also be asked to take action to ensure that the solidarity principle is not undermined.
However, the danger of increasing surveillance is countered by a clear increase in customer service, individualised services and flexibility on the customer side: Digital insurers rely on customer’s self-determination and a positive insurance experience in an industry that sometimes appears to be immobile and non-transparent.
Digitalisation has reached the insurance industry, but has not yet shaken its foundations. That will change: Tomorrow’s insurance will have little in common with today’s structures and processes. The autopilot at Tesla will also come for insurance. Not all companies will be able to master this switch to become digital insurers.
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