By Dr. Christine Bailey, Chief Marketing Officer at Valitor
Technology is leading the future of finance. A new wave of FinTech disruptors have revolutionised the way people make payments and manage their cash.
We can now purchase an item with a fingerprint, buy directly through social networks, control our finances remotely from a smart device and even make payments with a pair of smart sunglasses.
With so many disruptive financial solutions now available, there is a temptation for service providers to focus on the bleeding edge of innovation. However, it’s important to remember that being a leading business isn’t all about implementing the latest tech. In fact, the most successful businesses understand two things: they adapt and change without losing focus on real customer needs; and they realise that single technology solutions on their own are not the complete answer. After all, the greatest invention in the history of mankind wasn’t the wheel, it was the axle.
The wheel is often considered the greatest invention in history, but without the axle, the wheel wouldn’t have been able to function. The same argument can be said for all innovations. Businesses can’t just focus on the flashy front end technology if their back end systems cannot support it. For example, a retailer cannot accept payments from smart devices if they are not agile enough to process the purchase and integrate with back-end systems. Technologies cannot work in silos. Businesses must not only consider how a technology will benefit the customer, but how it will fit into their broader operations.
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If in doubt, think about customer need and technological innovation in tandem
Of course innovation is important – and the power of technology to transform relationships with customers should not be underestimated. This is especially true in retail banking, for example, where changing demographics are forcing a seachange. As a recent Moneysupermarket.com survey found, 71% of people aged 25 to 34 are likely to choose a bank based on its digital services, rather than products, rates or customer service.
Selecting the right technology for the customer is critical in ensuring businesses meet these demands while remaining technically innovative and profitable. The recent influx of AI and chatbots provides an example of how some businesses are getting the balance wrong. Whilst such technologies are known to cut costs for organisations and create a seamless process for customers, the lack of human interaction can often alienate consumers and cause a negative impression of both a brand and in turn, its balance sheet.
The quick and the dead
The one thing that businesses don’t have is time to consider the implications of changing customer needs. In today’s “expectation economy”, consumers expect brands to keep pace with their demands. If you won’t give them what they want, they will move onto another competitor in a keystroke or a swipe of a finger. Even the bulletproof bastions of global business are under threat from the power of customer choice. And it isn’t simply that customers are being fickle, they still want to get a great product or service from a brand they love, it’s just that an all-round excellent experience is expected, no matter when, where or how customers engage.
In a recent report, Gartner claimed that uncertainty in the customer experience is the fundamental reason for much of the frustration and disappointment that consumers feel towards brands. This customer uncertainty requires businesses to have a complete rethink on each and every stage of the customer journey. The relationship with a customer is only as strong as the weakest link, and so the next wave of innovation in improving customer experience will come from the least expected areas – and payments is on the front line.
First, it’s important for a reality check. No one wakes up in the morning hoping for a better payments experience. They simply want to buy what they want more easily and, if they are a merchant, they want to give customers what they want without losing sales to competitors. However, it is payments and innovation in payments technology that sits at the heart of ensuring a frictionless and rewarding experience.
According to 87% of mid-large retailers surveyed by Context Consulting on behalf of Valitor, omni-channel payment solutions play either a ‘critical’ or ‘important role’ in improving customer experience. This is because the payments process is no longer confined to a physical store; a customer may try an item in a shop, leave and purchase the item later on a smartphone. Therefore customer-centric organisations will ensure that the payment experience is consistent across online and offline channels. This will boost loyalty as customers won’t be frustrated or deterred by a disjointed shopping experience.
Businesses face increasing temptation to focus on the bleeding edge of innovation, but it’s important to remember that implementing the latest tech doesn’t equate to being a leading business. Innovation begins by focusing on the least expected areas such as payments. Such processes are integral to supporting front-end, customer-facing technologies. It is only then, that businesses can start offering a seamless customer experience.