Smarter Banking for the Intelligence Age

Demand from young consumers for quicker decisions regarding their finances means that financial institutions are relying increasingly on modern data-processing techniques to enable real-time empowerment.

A new generation of consumers, used to having instant access to information, is now demanding the same from their banks and financial institutions. They want to deal in real time on their mobile devices when banking online. They want new and better digital experiences; banking that is intuitive, mobile and responsive.

“Processing customer information securely and understanding customer needs at a totally personalized level is key for bankers to succeed,” said Guillermo Kopp, Director, Worldwide Financial Services Industry at Microsoft. To build these engaged relationships with customers, banks will need not only accurate and useful information, but will also need to ensure that the way in which they interact with customers is convenient (for the customer), relevant and occurs in real time. This will allow banks to dynamically guide their customers towards increased financial health.

An issue of concern for banks is that 79% of consumers in North America feel that their banking relationship is purely transactional. Modern technology, such as cloud and mobile technologies, has given banks the opportunity to completely redefine the banking experience for their customers and re-establish personal relationships. These tools will also help banks to work smarter and faster. It is now not simply about processing data and reporting on what has happened in the past, but the ability to make informed decisions about the future.

Niel Bester, Senior Vice President for Product at mobile security firm Entersekt, says younger consumers want quick, event-driven interactions with their banks, based on data regarding their overall financial position. “Historically, banking was appointment-based and took time, regardless of whether you sat in front of a PC or in a branch. Now, the younger generations tend to perform many on-demand, quick banking actions from their mobile devices, wherever they happen to be. The great advantage of modern technology is that it can provide consumers with the context in which their financial transactions take place,” said Bester. This will prove increasingly important as consumers’ demand for a personally tailored service grows. For example, a person buying a pair of shoes using a banking app could be made aware of how the purchase might impact their clothing budget, for example, or impact their spending budget for the weekend away at the end of the month, hence enabling informed buying decisions.

“Modern technology can examine a person’s overall financial position and behavior, allowing a bank to make trusted, opportune financial health recommendations,” Bester continues. “The buying event can happen, but it can be automatically contextualized against affordability, cash flow, and general financial health. Currently, events occur in isolation. With modern technology, payments can be seen holistically against the backdrop of a person’s financial wellbeing. On the morning of Black Friday, for example, my bank sent me an SMS gently advising me not to be enticed into overspending. That made me feel that the bank was more interested in my long-term financial health than in making more money from a bigger overdraft. I’m definitely more likely to remain loyal to a brand that supports my financial well-being.”

Bester says banks can use modern technology to build trust with consumers and further cement relationships. It provides the ability to make faster decisions for customers, and improve customer recommendations, advice and experiences. Banks need to bridge the gap between what they are currently offering, and what customers want and have come to expect in this new highly connected world.

“The whole financial services industry is embracing modern technology, and we can expect to see innovative new automated services designed to offer advice, and encourage financial responsibility,” concludes Bester. Banks can develop these innovations internally, or they can collaborate with fintechs, building on their existing expertise.

One way that Entersekt is leading the pack is in allowing banks to securely interact with customers in real-time, as events happen. Entersekt’s products enable push authentication, secure user notification, and secure, rich media communication, such as voice and video. Our products also enable mobile payments that allow banks to be “present” at the point of transaction, which gives them the opportunity to influence behavior before the payment is made, instead of simply reporting on the impact of the decision after the fact. In this way, banks can provide that ever more important service – constructive and timely customer engagement.