What comes after cashless?
When was the last time you went into a shop and paid with cash?
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.