With 2021 upon us, the banking industry recognizes consumers continuing demand for innovation. The all-important top-of-wallet status that banks seek now requires more than just a payment card promising cash back bonuses. Banking customers are looking for convenience but are also concerned more than ever about how what they do affects the world around them. Banks can easily contribute to this growing demand if they consider these three opportunities:
Contactless Comes for the Pandemic, Will Stay for the Convenience
2020’s global pandemic is causing havoc on people’s lives and has customers rethinking their every move – including how to pay at the point of sale. A National Retail Federation (NRF) survey found that 19% of people made their first contactless payment during the month of May this past year alone, two-thirds of which said they were satisfied with their experience. With 57% likely to continue once the pandemic has subsided, banks can be assured this adoption is not just a temporary spike, but rather a long-term trend for a solution segment that can no longer be ignored.
While COVID-19 realities have helped grow contactless payment adoption, the consumer demand for convenience at the point of sale doesn’t stop at the hygienic benefit. Consumers also want digital payments to be as quick and user-friendly as possible, without putting their personal data in jeopardy. Banks can gain a leg up on their tech-savvy fintech competitors this year by partnering with technology experts that can support the delivery of solutions at scale and at the speed, ease, and level of security that consumers expect.
Banking the ‘Unbanked’
The COVID-19 pandemic and ensuing economic fallout – combined with the social justice issues at top-of-mind across the U.S. – have also brought to light the issue of financial inclusion. More people are relying on government issued funds than ever before, but many lack the access to traditional banking services needed to access these funds quickly and without paying significant check cashing fees.
The World Bank Group’s Global Findex Database reports about 1.7 billion adults worldwide remain ‘unbanked’ — without a traditional banking account at a financial institution or through a mobile money provider. In 2021, banks must work towards bringing more people into the formal economy who currently have limited or no access to financial services. The growth of innovations such as ‘Converged Cards’ – state-issued driver’s licenses or IDs with payment credentials – will help consumers who rely on public sector funding better access payments from government programs including unemployment, housing, utility benefits, and more.
Sustainable Solutions to Drive Customer Satisfaction
According to a Dents Aegis Network study, consumer demand for environmental accountability is at an all-time high. The study found 92% of global customers believe their bank should actively contribute to preserving the environment, while 87% expect their bank to make cards out of eco-friendly materials.
Innovations and initiatives such as sustainable card bodies, eco-designed packaging, digital services replacing paper, end of life recycling, and offsetting, will enable banks to continuously improve their banking products and services to support a sustainable transformation in the banking industry. Those that embrace this growing consumer demand will be best-positioned to build trust among environmentally conscious customers and enjoy the added value of a sustainability-first approach.
2020 has shown that the banking industry must remain innovative, flexible and resilient to hit the moving target of consumer demands driven by our unprecedented circumstances. To keep up, banking industry leaders must seek out innovation-driven technology partners that can provide the secure backbone for the future of traditional and digital banking solutions while delivering the social and environmental leadership that consumers have come to expect.
Megan Heinze is President of IDEMIA’s North America Financial Institutions Business Unit. Leveraging her experience in banking, technology and payments, Megan is responsible for growing IDEMIA’s business within the Payment Ecosystem and Financial Institutions.