Written by: Malik Azeez, Director of PIM
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Consumer Tendencies in Banking
It has become ‘the norm’ to understand technology irrespective of our field of work. We are living in a tech savvy consumer’s market that is growing exponentially, touching every industry, and leading people to aggressively explore their online strategies (food, electronics, clothing, education, etc.). An online strategy is incomplete without a strong framework for payment methods on the backend. Just as people have adapted to cashless transactions over the years, it’s imperative that financial institutions understand the various payment methods in depth and build payment gateways conducive to consumers’ buying habits. Credit cards are an essential part of this strategy. The number of global credit card users has always been rising – it is predicted to be around 191 million by 2022. We also need to understand the role of mobile banking and its impact on the mindset of consumers. It is forecasted that mobile banking will reach two billion users in 2020. Since consumers have begun to trust mobile apps for bank account management, credit cards, and expenditures, their confidence would only continue to demand better payment products and services. Payment options such as mobile apps and wallets are slowly replacing the physical credit card due to their ease of use. The mobile wallet market size is forecasted to hit $250 billion by 2024. Many online merchants are keen on pushing their own wallets to consumers in a bid to offer financial perks and build customer loyalty. Millennials are one one of the biggest adopters of this mode of purchase (35%) and are quite proficient in knowing the most valuable payment product, taking to social media to spread the word quickly (88% of millennials get news from Facebook).
Technologies to Fuel the Banking Experience
Artificial Intelligence & Machine Learning
Banks need to learn patterns and build and train models in order to leverage the power of artificial intelligence (AI) to automate many mundane tasks, like teller functions, and critical processes, like fraud detection. Structured data is critical to achieving a predictable set of activities and harnessing the power of AI in decision making. Customers look for suggestions and recommendations so they can understand and act fast in choosing the right products. For example, recent eating habits can trigger a recommendation of appropriate restaurants that earn more rewards on the credit card. It’s forecasted that banking spend on AI will reach $79 billion by 2022, second to the retail industry. At one leading bank, 70% of 75,000 targeted card holders redeemed rewards based on recommendation by AI.
Data Analytics
In our fast-paced world, understanding consumer preferences goes a long way in building a customer-centric business operation. It only becomes natural to build products based on data emphasizing consumer demographics – this is what establishes an emotional connect with a customer. An organized set of data is critical to build this relationship.
Voice Enabled Automated Commerce
Driven by natural language processing (NLP), the next generation will be driven primarily by voice enabled assistants versus manually logging into an app or website to perform day-to-day banking. It may provide an enhanced experience, ease of transacting, and faster service. It would certainly feel personal to hear some of our preferences rather than read a message. It’s estimated that voice enabled transactions by US adults alone could grow to 31% by 2022.
Click here for the complete white paper: Information Management in Banking
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