By Tuomas Nenonen, Business Manager for Consumer Management Services at Nets.
In a few years, traditional banking services may be faced with their toughest challenge yet: How to create value-added banking services for demanding consumers while at the same time holding off competition from experts in digitised user interaction such as social media and internet companies.
To meet the challenge, a study by PwC estimates that banks will adjust their business models by 2020.
Firstly, they will organise themselves around consumers rather than around products or channels, offering seamless consumer experiences that integrate sales and services across all channels. Banks will recognise consumers' need for uniqueness, and tailor their offerings to them so that consumers will view banks as 'meeting their needs' instead of 'pushing them products'.
Secondly, social media will be the media of choice. Today, we view social media as co-existing alongside traditional media. By 2020, social media will be the primary way to connect, engage, inform and understand consumers. Consumers will also use social media to research and compare banks' offerings.
Thirdly, banks in most countries will evolve the consumer experience to be more female-friendly as more and more women will be the primary breadwinner, and women will control more wealth and spending. Banks will address this through a combination of branding, product and service solutions.
In my opinion, banks can in practice assume the position of trusted advisors that help consumers stay on top of their finances, simply and digitally. Consumers expect banking services to be intelligent, to add value to everyday life, and to be right at their fingertips. This will be the strategy of the future.
Intelligent banking services will be able to predict consumers' future payments and help them plan purchases or instalment payments to come. Intelligent banking services may also help consumers shop by recognising their location and offering special deals based on past shopping behaviour. Last, but not least, intelligent banking services may allow consumers to make purchases directly from a social media stream, enable one-click payment, and share product information and comments.
As long as the consumer experience in the mobile space is 100 per cent frictionless, the sky is the limit. By digitising the centre of consumer demand, banks can hold on to their position as trusted advisors and even have a competitive advantage due to their access to vast amounts of financial consumer data. This data will pave the way for a strong digital platform and value-added, customised mobile services of the future.