Big Tech and FinTech firms are busy creating their own
connected ecosystems while striking up relationships with banks, making
traditional financial services firms part of the system, too. Google stands as
a prime example, with Google Pay and Google Plex. And in other parts of the
financial services landscape, FinTechs are trying to enable banks to become,
well, more like FinTechs.
As the connected economy takes shape, banking, payments,
commerce and merchant ecosystems are all striving toward linking up,
communicating with one another through digital channels. And there’s a common
point of contact: the customer.
Putting The Customer At The Center
In an interview with Karen Webster, Doug Brown, president of
NCR Digital Banking, said that for banks and merchants, focusing on that
commonality can turbocharge the omnichannel commerce experience, cementing
individuals’ loyalty to merchants and financial institutions (FIs) in one
seamless flow of data and interactions – from browsing the aisle (virtual and
otherwise) to making the payment.
Data, of course, underpins it all, but getting it right –
really crafting the ecosystem itself – depends on far more than the technical
underpinnings of ensuring that information flows between parties. There’s any
amount of competition to get that data captured and flowing, and to gain
customers’ attention and share of wallet.
Breaking Down Silos
As Brown noted, value is unlocked when silos are broken
down, and the consumer is at the center of it all. He said banks have a unique
advantage in accelerating the evolution of connected commerce systems because
they “oversee” consumer relationships within all parts of that ecosystem.
“If you ask who has the best position overall, I would vote
for the banks and credit unions – because they are the stewards and trusted
sources of data and information on the consumer,” said Brown.
With a wealth of data on hand about how individuals pay, and
how they want to pay, the traditional FIs serve as a fount of insight for
retailers. But up until recently, sharing that data has been a challenge.
Retailers and banks have not exactly been digital-first
verticals – they’ve relied on physical branches and brick-and-mortar
establishments – but the great shift wrought by the pandemic has forced them to
increase their reliance on digital channels to engage with their end customers.
“What we’re seeing now, more than ever, is that
digital-first need not mean ‘digital-only,’” said Brown. “It’s a digitization
of the whole experience, wherever it happens. We’ve seen it in retail, and most
recently with restaurants, with order online, pick up at the curb. We’re seeing
banks embracing that model, too,” with contactless interactions at the ATM, for
example.
Along the way, said Brown, all stakeholders – especially
banks and retailers – are grappling with the challenges of cybersecurity, data
protection and even getting more fully online in a streamlined manner.
Partnerships can help enable and expand that digital
presence. Brown pointed to NCR’s acquisition earlier this year of Terafina,
which, billed as a digital-first banking platform, helps with account opening
and onboarding across digital, branch and call center channels.
Beyond The Tech
But bringing together those far-flung parts of the
ecosystem, said Brown, involves far more than just getting new technology into
place. As new models evolve, another hallmark of the connected economy has
been, and will be, collaboration.
Connections across payments, commerce and banking, he said,
hinges on cooperation and shared incentives between banks, retailers and their
customers, in a coordinated model that taps the value and unique delivery
conduit of each of those entities.
There are different modes of incentives, Brown noted.
There’s the classic rewards model, which can lure consumers with discounts, but
the digital age can enable a “blended experience” that benefits everyone – the
timely payment helps the merchant, the reward is savored by the consumer, and
the bank gets the benefit of increased transactions.
“This is where the power can be unleashed when brought
together more deliberately between banks and retailers,” he explained. “You get
credit for being a great, loyal customer, and the service handling aspect is
improved.”
Collaboration has an inherent advantage in making sure that
firms’ efforts are not duplicative, and that the consumer feels comfortable
that their data is secure and their time spent on an app – or omnichannel
retail experience – is both valued and economized.
Looking Ahead
A few years from now, Brown said, we may be talking about
neural banking – but along the way, he predicts that we’ll see a rapid
acceleration of demand for digital journeys from consumers, faster technology
enablement (particularly with Cloud API) and the connection of ecosystems that
not all that long ago did not seem possible.
“The world is wide open,” he said of the joint and mutually
beneficial relationships between banks and retailers. “And as we look at the
horizon, it’s going to get pretty interesting.”
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