Trends in finance are evolving rapidly. What started as a digital revolution in banking was then forced to accelerate with the onset of the COVID-19 pandemic, keeping most people from managing their finances in person. The state of the world has set off a chain of innovations and new opportunities for banks and credit unions – but to harness them, institutions need to get ahead of them. Here are 5 money trends financial institutions should get ahead of.
Contactless payment options were already on the rise, but with the dawning of the COVID-19 pandemic, everyone started paying a little more attention to the things they were touching – like cash and credit cards. And it doesn’t seem like this trend is going away. According to a Mastercard Global Consumer Study in 2020, 76 percent of consumers said they will continue using contactless payment post-pandemic.
This also applies to other financial services – anything people might need to go into a brick-and-mortar bank or credit union for. Particularly with younger populations, they’ll generally avoid having to go to a bank in person. According to American Banker, the US financial industry’s total branch count went down by more than 1,500 over a period of 12 months as of February 2020.
You may have good reason to keep your branches alive based on your customers and services, but when it comes to future spending, you’ll want to be investing in technologies that facilitate contactless financial services.
Online and mobile banking, and the ability to collect more data about customers, sets the stage for a higher level of personalization. This is incredibly important for marketing and upselling your current customers and members. When you know your customers’ interests, past purchases, and demographic information, it’s easier to offer them new products or services that will actually be helpful to them.
Not to mention, personalization can help with customer retention. You won’t have to shoot into the dark and bombard customers with a slew of offers they won’t be interested in, causing them to turn away annoyed. Using data to personalize your customer’s experience is good for both you and your customers.
We already covered contactless payments, but mobile payments are a subset worth mentioning on their own. A mobile payment is simply a transaction that is made with a mobile phone. With Apple Pay, Google Pay, and Samsung Pay as the top players in the game, and others like Venmo and PayPal also heavily used, banks and credit unions have been quick to adapt their own forms of contactless payment.
While you may not be keen to create your own mobile pay app, you can make sure your institution easily integrates with these apps and offers credit cards that work well with them, such as Visa.
When a pandemic hits, causing an economic recession, people are looking to save. For many, it’s made them reconsider the necessity of emergency funds, which may have been shrugged off in the past. In general, many people are interested in keeping more of a cushion in their bank accounts, and budgeting is a great way to do that.
There are lots of opportunities for banks and credit unions to add value by helping their customers become better budgeters. Maybe it’s having a budgeting tool within your mobile banking app, or partnering with a budgeting app for mutual benefit. Or you would simply write blogs and other informational pieces that educate customers on how to do it on their own.
With fewer people calling their bank or visiting a brick-and-mortar branch, banks and credit unions are pressed to find ways to provide responsive, real-time customer service without being face-to-face. Enter chatbots. Those little pop-up windows in the corner of your webpage are making waves in the financial world, helping field questions and concerns with much less money and effort than ever before. According to Juniper Research, it is estimated that the deployment of chatbots will save the banking industry $7.3 billion in annual customer service costs by 2023.
Most of these trends rely heavily on digital marketing to be successful. To take on one of these new initiatives and see a benefit, it pays to have a dedicated marketing team in-house or partner with one that understands your industry. PRIME has been working with financial institutions for years, helping clients stay up-to-date on the latest digital trends. Reach out to us to find out if a partnership could be just what you need.
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