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This article by Stefanie O’Connell first appeared on stefanieoconnell.com in November 2015. Confession – I’ve made a major mistake in growing my business. Though my earnings have climbed exponentially over the past two years, I found...

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February 3, 2016
/   Insights

The convergence of operations technology and information technology presents new and expanding market opportunities. The “Internet of Things” is a center point of this convergence. IoT can bring remarkable benefits to today’s ever-changing business...

Mobile Banking Surprises Yet to Come

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July 23, 2014
/   Spotlight

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Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

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Fast Facts: Student Loans

January 22, 2013
/   Insights

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The Top 10 Trends in the Digital Banking Industry

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Technology M&As: The Beats Go On

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/   Insights

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What We’re Reading

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/   Spotlight

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/   Insights

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What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Consumer and technology trends

Consumers have grown accustomed to a faster, more secure world and expect payment solutions to follow suit. Cash and checks have taken a backseat to faster, more efficient payment methods like credit and debit cards.

Over 2 billion consumers are expected to own smartphones by next year. This affinity for technology has created a culture of convenience, so it’s no surprise that mobile payments are increasing in popularity. Millennials, in particular, are embracing mobile payments with open arms: 44% of Millennials would rather use their mobile phones than cash to pay for smaller ticket items. The trend towards increased smartphone adoption as the central computing device for many households is driving a demand for “mobile first design” wrapped in iron-clad security measures, among customer-facing banking and financial institutions.

Because of the need for fast, secure transactions over inherently personal and often insecure devices, there is growing interest in biometric verification payment systems. Companies have taken note of this trend; Apple Pay’s mobile wallet solution requires fingerprint authentication to pay within apps and Samsung is looking at implementing biometrics on their devices in an effort to “promote the payment platform without worrying about scaling security concerns”. Going a step beyond securing our devices, there is also the growing movement of making our money itself more secure.

Cryptocurrency is often lauded as the future of payments. The most autonomous and transparent currency, it is not governed by any monopoly of power. Cryptocurrencies like Bitcoin run on a decentralized system of computers and use a secure “blockchain” ledger that is verified by the community through cryptography. Financial organizations are now developing payment solutions that allow businesses to accept bitcoins. Payfirma recently launched a beta program for a bitcoin API, because omni-channel means allowing customers to pay any way they want.

The bottom line for banks and businesses

So, what do these consumer trends mean to banks and the small businesses they serve? Simple: convenience + simplicity + security = loyalty.

Consumers are searching for ways to simplify and speed up their payment processes – and gravitate to businesses that make it easy for them. 50% of Millennials want mobile payments because they want faster transactions. 74% of adults in the Millennial generation say mobile banking is extremely important to them. 85% say they are open trying new banking and payment technologies. More adults are showing a preference for speed and convenience, and will seek experiences that make these possible.

While mobile payments are popular with Generations X and Y, we can’t forget about the many other payment methods that consumers still need access to, including recurring billing, eCommerce, and traditional terminals. Businesses that offer an omni-channel payment experience will gain the loyalty of today’s speedy, savvy shopper.

Omni-channel payment process

While multichannel means offering multiple ways for people to pay, omnichannel is the holistic glue to integrating payment channels so that the consumer experience is seamless and there is a single view of payment data across all channels. Consumers have come to expect integrated and personalized experiences when they buy. From browsing on social media, to clicking through to the mobile site, to paying on the computer, the modern customer moves across multiple channels while shopping.

The challenge for merchants is integrating the various payment channels in a way that consumers can choose their preferred way to pay and still receive the same brand experience. In addition to a seamless experience, consumers are demanding personalization. They want customized discounts and personalized offers. A single platform for all payment channels allows businesses to collect customer data around purchasing preferences and habits to tailor consumers’ future buying experiences.

Sephora is a company paving the way in omnichannel retailing, with a large and loyal consumer following. The beauty retailer has a highly successful loyalty program, coupled with their interactive online store and engaging mobile app. Customers can access their purchase history, preferences, and beauty points from their preferred channel. Sephora then leveraged this data to create personalized product recommendations, yielding an 8x rate of growth vs the previous year, and a 71% increase in average in-store basket size. These are some impressive gains however you look at it.

Bringing it all together

Financial technology innovation is driving and shaping how consumers interact with banks and businesses. To keep up with the changing demands, companies need to consider consumer preferences and cater accordingly. Focus on providing businesses products with mobile-first design principles, rock-solid security, and fast convenience, across all channels.

About the author

Robin Jones is the CMO of Payfirma and has more than 20 years of experience as a marketing strategist in global technology organizations. Payfirma’s omni-channel payment solutions make it easy for merchants to get paid any way their customers want to buy: online, in-store, or on the move.

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp