More and more of us are ditching our wallets, and with them
the use of physical cards and pin numbers.
The pandemic accelerated the transition to a cashless
society globally, but we have been heading in that direction for quite some
time. So much so that in 2020, the number of people in the UK who say they
rarely use cash grew to 13.7 million, almost double the 7.4 million figure in
2019.
The explosion of data, and what to do with it
For businesses, a key benefit to an increasingly cashless
society is the explosion of data it brings, but the real advantage lies in what
you do with the data you collect.
This is how you truly understand your customers. Cashless
customers have created rapidly changing consumer needs. They demand more
personalisation and at the same time expect products to deliver on simplicity
and ease of use.
The explosion of online banking apps and contactless
payments not only deliver on these expectations but are also more efficient
models of payment. Looking ahead, financial services leaders must draw on key
insights to deliver outstanding customer experiences that not only meet current
needs but offer incentives for the future.
The protection of data in a cashless society
As we move closer and closer towards a digitally driven,
cashless society, how will fintech utilise and protect customer data?
While digital payments create the opportunity for financial
services institutions to better understand their customers, the risk of
customer data being exploited by fraudsters becomes a major concern.
And it’s easy to see how these concerns arise, especially
for those used to cash payments which leave no digital footprint. With the democratisation
of data, consumers are much more aware of their digital footprints and are
often left wondering when making a purchase: who is using my data and what are
they using it for? Not to mention the rise in data breaches and cybercrime
during the pandemic.
But the good news is that in addition to adhering to local
data protection laws, financial services institutions can use data and
analytics to identify emerging threats and provide insights to predict and
alert to potential fraud. Leveraging the power of data in this evolving
environment will help financial institutions predict consumer behaviour and be
alert to potential risks.
How are financial institutions embracing change?
To embrace this digital reality, traditional financial
institutions are rethinking their existing technical setup and investing in
modern data and analytics tools to help understand customer needs and
accelerate digital transformation.
Data lies at the heart of the financial services sector’s
digital transformation. It holds immense potential for the sector and companies
are scrambling to reshape their business models in order to take full advantage
of that potential.
Garanti BBVA, for example, recently undertook an ambitious
project to transform its 900 traditional branches into digitally focused
service centres and has successfully transformed its employees into
self-serving analytics users.
But old systems and a lack of relevant skills can create
huge obstacles, with 44% of financial services companies having difficulty integrating
new technology with legacy systems.
The good news is that there are plenty of tools to help
businesses make this transition, and to prepare for a cashless society today,
and tomorrow.
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