Traditional banks cannot avoid adapting to the new requirements and desires of their customers if they want to stay relevant. The focus, therefore, should be on creating a compelling mobile wallet solution that cuts across all situations in life. G+D’s insights show how banks can take center stage in their customers’ digitally connected lifestyles.
The finance industry is considered a highly competitive landscape, where big techs and fintechs have created additional competitive pressure through innovative digital products.
Banks that want to stay relevant in this market must keep pace with the latest developments in user experience and adapt their portfolio to the increasing expectations of their customers.
While digital wallets were a big first step, leveraging the existing touchpoints between consumers and digital banking service, the next step needs to be taken as banks run the risk of just bringing another bank app with limited functionality to an already overcrowded market.
Customers already have numerous touchpoints with their banks for payment-related matters, such as buying a financial product, checking on a payment, or paying a bill. Added to this is the high level of trust that many people have in their “traditional” bank – more than three-quarters of consumers in key European markets say that their main financial relationship is with a traditional bank.
Digital wallets adoption is on the rise, with globally 53% of consumers holding a mobile wallet. Usage varies between 25% in Germany, 65% in Brazil and 88% in India. Creating an ecosystem of digital services tailored to the demands of customers is not only viable but desirable, too.
G+D and its strategic partner Netcetera present three ways for banks to turn their digital wallets into customer-focused super wallets:
* Meeting the needs of target groups. Super wallets are not limited merely to pure financial services, such as transactions, but rather cover the entire lifestyle of the very vary customer base, independently of their age, tech-savviness, or financial knowledge. They enable banks to offer a wide range of services for a variety of target groups: from traditional banking services and payment offerings to loans, investments, insurance, and cryptocurrencies, as well as travel or even services related to sustainability. The banking solutions of the future meet the demands of customers who want to use digital solutions easily and quickly – thus improving the customer experience. True to the motto: One app for all circumstances.
* Building a customer-centric ecosystem. The foundation for super wallets and integrated offerings that target the needs of consumers are strongly networked ecosystems. In these networks of partner organisations and complementary providers, banks must be at the center and act as the main player – regardless of whether it is a self-founded ecosystem or not. In this way, traditional retail banks can survive in the competitive financial services market and secure a firm footing in their customers’ digital universe through genuine added value.
* Offer a unique and personalised customer experience. Today, consumers expect their banks to address them in a way that is tailored to their needs and provide them with corresponding services. However, the spectrum is wide: depending on personal preferences, it ranges from personalized shopping offers to notifications when a certain account balance is reached, to concrete savings tips based on a customer’s spending. For banks, having all this data at their disposal, the starting points are manifold. The challenge is to convert the existing treasure trove of data into actionable insights, play them out automatically, and thus deliver added value to consumers. The important thing here is that data protection must not be disregarded under any circumstances. New solutions such as privacy enhancing technologies (PET) remedy this by working exclusively with anonymised and encrypted data. In this way, banks can offer personalized products and services without using personal information.
“Digital wallets are not just a trend for banks to jump on, but a necessity in a market that is already oversaturated in some areas,” explains Dr Carsten Wengel, head of global sales and distribution in the card and digital payment business at G+D. “Many customers already use these and similar technologies in their everyday lives and now expect their bank to follow suit and provide a corresponding range of digital products and services, compactly brought together in an app. G+D together with its strategic partner Netcetera supports banks in this endeavor with expertise and experience in delivering these solutions.”