When it comes to managing their money, customers are demanding more transparency, personalization, and convenience, but it seems like no one is fully satisfying their needs yet. While traditional banks are finding it hard to deliver sleek digital experiences, neobanks and other FinTech players can’t seem to convey the sense of trust and security that established financial institutions bring to the table.
Last week, Strands attended Mobey Forum’s Member Meeting in Stockholm. The event was an incredible opportunity to discuss the latest trends in the financial services’ space with business leaders, academics and some of the most influential disruptors in the industry. After two days of invaluable insights and conversations, we’re more excited than ever to be a part of such a stimulating ecosystem. These are our three key takeaways from the event:
1. Collaboration is Paramount to Meet Consumer Demands
We’ve experienced it firsthand; through collaboration, great things can be achieved.
We may still be in the early days of the Open Banking-PSD2 era, but experts agree that this new collaborative environment is more of an opportunity than a threat. Open APIs are likely to lead to new services not yet contemplated, and it’s our mission to find out how to monetize them.
According to data collected by Mobey Forum and Aite Group, consumers appear to strongly prefer their main bank to provide them with new retail banking services over other providers. However, it’s undeniable that some of these third parties are offering a better customer experience, which is a great incentive to switch providers.
All this provides an excellent opportunity for white-label software developers, who are able to blend the most innovative technology and UX practices with the trust that banks widely enjoy from their customers.
2. In Cashless Societies, AI Will Be Key in Tackling Fraud
We’re arguably undergoing the greatest disruption ever: the so-called 4th industrial revolution. Science is making the unthinkable possible, but we should keep in mind that virtually every new type of technology is accompanied by its own new type of criminal.
Mobey Forum’s event revolved around the idea of cashless societies. There’s plenty of buzz surrounding this concept, and while it seems that its materialization won’t take place until the distant future, the increasing disuse of notes and coins is already raising questions, and not just among tooth fairies and piggy bank manufacturers.
In theory, a cashless society should reduce crime. That might be true for muggings and armed robberies, but its impact on financial crimes such as credit card fraud, terror funding, money laundering or even drug dealing is still unclear. Besides, in a cashless society, preventing digital identity theft should be a top concern. (Insider question: Could acting as digital identity verifiers for governments be a new market opportunity for banks?)
In light of this new situation, financial institutions and FinTech firms see artificial intelligence as the key to tackle financial crimes. By leveraging big data and AI, banks and governments can detect patterns tied to fraud and other financial violations, thus reducing crime-fighting costs and risks.
However, the widespread adoption of AI will remain a challenge until discrimination in algorithmic systems can be fixed. According to a paper published by The New Economics Foundation, “if data is the new oil, algorithms are the new refineries.” This is why it’s so important to be able to detect and mitigate hidden biases within data and to train algorithms to maintain the principle of fairness.
3. Banks Should Focus on Personalization
Establishing meaningful relationships with its customers should be every bank’s number one priority. The way to achieve it couldn’t be more clear: personalization.
Earlier in this post, we mentioned the vast potential that can be unleashed through collaboration. In the view of industry players, one of the main aims of such partnerships should be making banking products appealing.
Sure, asking for credit is not the most exciting thing to do, but if banks manage to listen to their customers’ needs and concerns, delivering a more personalized banking experience and bringing emotion to financial products and services is certainly possible.
In order to establish a productive relationship with their customers, banks need to ask themselves the question: “how are we helping people manage their future?”
For example, business and personal financial management tools provide banks with a unique opportunity to get to know their clients better, offer them more relevant, tailored products and truly help them live the life they want.
The technology is already here, it’s just a matter of putting it to use.