- Cash is no longer King, in the digital era, carrying physical card is more of a rarity and in today’s digital world contactless payment is the norm rather than the old way of counting cash.
- All our transactions are being analyzed by AI by our devices, organizations and suppliers for many of the products and services that we use with a flick of our fingers on our devices.
- We make our investments and bill payments online, and soon we will be able to deposit cheques through our phones or could cease using cheques.
- We no longer visit a brick and mortar premises for a banks, financial services or Insurance company.
The underlying driver for the digital transformation of our relationship with the financial industry is “trust”.
In the old days financial institutions were architectural marvels to instill faith and trust in the cash economy.
In today’s digital world the trust is based on other parameters, though some of the old attributes of trust still survive.
Creating Trust in financial institutions in the Digital Age
The cloud has created a new paradigm in digital financial services, the adoption of the cloud by financial industry has increased the access to banking solutions.
A number digital banks are emerging without the baggage of brick and mortar, this has broken down the barriers of entry in the financial industry.
A host of new service offerings that use technology, data and scale have emerged morphed into the term fintech.
Fintech impact is deep and sustainable and is a threat to the traditional financial industry.
In the new paradigm of cloud, data, scale and mobility”trust” has emerged as the dominant driver for the consumer in the use of digital portals.
Here are some of the key factors that need to be addressed to build Trust :
1. Privacy of personal data
A key factor is the consumer’s concern on the privacy of personal data in the digital ecosystem, can the consumer be assured of privacy of their personal data.
2. Brick and mortar is dead
The old brick and mortar is dead, no one visits a financial institution anymore or for that matter need to visit a branch for cash transactions, neither is personal relationship is a valuable asset anymore. The digital world is transaction driven and the catalyst transaction volumes is trust.
3. Price is no longer the driver
Trust is the driver for customer retention today and outweigh price which was the earlier driver, price includes interest rates, transaction charges and more. Though price continues to be a driver for the baby boomer and older generation, the millennial is driven by discounts and deals and speed of execution rather than the actual price/rate . .
4. Ease and convenience of service
How fast can I get started, consumers want to get started in minutes rather than days in the digital age, ease and convenience are key drivers for customer retention in a crowded marketplace.
5. Trust with the Brand
What is the trust quotient of the financial institution? This is an important driver for the millennial who is not impressed by the glorious past of the financial institution they rely on current brand trust which is driven by social media .
6. Service Resolution Quality and speed of execution
These are important, can a service resolution quality be an delightful experience and issues resolved in minutes rather than days, can the speed of execution be in minutes rather than weeks. These are essential in building trust with the institution.
Are the services available in any network and does it have global accessibility, for consumers who juggle work and travel these are important requirements in building consumer confidence and in customer retention and customer trust.
8. Technology Solutions
Technology solutions must solve the problems rather than creating additional problems, solutions need to be intuitive ,easy to install, initiate and use in any type of digital device including mobiles. Are the solutions trust worthy and not scavenge data from my device, these are important considerations in building technology solutions for digital consumption.
9. Reliable fraud protection
Fraud is exponentially growing in the digital world, it is important to understand that better fraud protection capability stands out as one of the major trust-builder along with deploying technology that is useful and effective
In conclusion successful financial institutions will be those who create the world’s best and most secure digital experiences for the customer.