FinovateFall 2020: Customer trust will test the new digital normal
While digital has become a central part of the “new normal”, a lot more work is necessary to ensure that customers continue to trust these new systems.
That’s according to a panel of banks and market participants, speaking at the virtual FinovateFall 2020 conference this week.
Vaduvur Bharghavan, CEO of Ondot Systems, says that some digital trends have “resonated” with consumers even before the COVID-19 pandemic.
“Customers have a plethora of choice […] whether you do commerce or self-service it’s the new way to interact with everyone, from issuers to users.”
For Bharghavan the reaction of the wider industry is a key consideration in how these solutions develop.
Mayank Mishra, managing director and global head of digital channels at Citi, agrees. “The only way to engage is digitally. The big positive I have seen is that there were a lot of digital laggards and they were holding on to the old ways of doing business.”
“In this scenario they aren’t left with much choice, so we are seeing the transformation of laggards to adopters really quickly,” adds Mishra.
Revolut US CEO, Ron Oliveira, states that the laggards aren’t just corporate. “Millennials are our usual clients but we’ve seen people in their 60s and 70s embrace digital while they have been sequestered at home.”
“The real elephant in the room is trust,” he adds. “Lots of people are used to walking down the street and meeting someone in a branch.” That trust is something that digital brands have to work on recreating.
Is the trend toward digital services and solutions a false dawn? Mishra doesn’t think so. “What we know is that there is a wide acceptance of digital as a medium. What that has given rise to is the concept of the platform business model.”
The Citi exec believes that banks don’t have to be the “creator of everything” to their clients. Partnerships with fintechs and the creation of a network of partners are a way to ensure a customer’s needs are met.
Oliveira adds that times are “more confusing than ever” for the customer.
“Digital is safer than ever, safer than getting cash from an ATM. We all know this, but that’s not the same for a lot of people.
“It’s complex because what people have in their wallets is a digital card but they have three or four from other accounts in there.
“They’re being digital because they have to. There’s nothing keeping them from walking back into the branch, unless they feel they are getting value from that relationship.”
Jeremy Berger, COO and co-founder of Arival Bank, says that trust can be shown in active user statistics.
“When you have 10 million customers or 15 million customers but only 30% are active users that signals something. This should be a big trigger,” says Berger.
Berger adds that the hyper growth of some fintech and finance start-ups doesn’t reflect the market. He says that success in some cases is a result of venture funding and not sustainable business models.
“Blitz scaling doesn’t work for firms in banking. This isn’t a winner takes all industry.”