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Aug 1, 2017

Industry insights,

How technology is shaping finance

Over recent years, businesses in the financial sector have started to become intrinsically linked with the latest technological advances, often being some of the very first in business to adopt and roll out dedicated tech.

Think about banking in the 80’s, and it conjures up visions of queues, the unavoidable human interaction and dealings with actual paper money. Banking of today aims to shape the customer experience into something very different, and they do this with the use of technology.

60% of all people in the UK now use online banking, which is a growth of 100% since 2007*, While it is fair to say not everyone had access to the internet at home in 2007, the growth in online banking demonstrates the intrinsic connection between the growth of technology and the banking industry. In 2016 mobile access overtook desktop, a trend that has been seen throughout all online transactions. Other experience enhancing technology can be seen through payment options such as PayPal and ApplePay, providing consumers with choice and a secure way to pay for their goods. Furthermore, MasterCard is currently trialling biometric fingerprint recognition, which they are looking to roll out later in the year, following successful completion of the trials in South Africa. 

Although some of these technologies are being rolled out via retailers or third parties, financial businesses are still using the adoption of technology to enhance their customer’s experience. It is a bit ‘Chicken or the Egg’ though, as organisational based in the financial sector are adopting new technology, and at a rapid rate, but it’s influenced by the demands of their customers. Customers want to have choice, they want to be able to access their money as and when they need it and they want to be able to do this securely, wherever they are – even on the morning commute.

A key reason for this ‘adoption of tech’ has to be differentiation. Businesses in the financial sector have inherently offered like-for-like products and whereas 20 years ago it was almost impossible to differentiate the Barclays from the Lloyds, and equally almost as pointless to try, as customers simply didn’t switch banks, it was not easy and held little value for the customer. Now though, switching is easy and the choice is vast, while many banks no longer have a high street location, opting to provide virtual services using Cloud based applications and an unrivalled online user experience. Banks such as Atom, that launched in April of this year is the UK’s first digital-only bank, who provides its customers with mobile banking technology that utilises face recognition access through the use of an app. It’s one of many new start-up financial businesses that are opting to offer consumers the opportunity to manage their money with a digital-first approach.

 

* Statista