Digital trends driving innovation in the payments industry
Here we roundup the key trends that are shaping the future of the payments industry.
As digital payments continue to become the new norm, banks and payment providers are under increasing pressure to keep up with the latest technology. We’re now living in a world where our digital wallets are set to replace our physical ones. Due to the rapid pace of change today, traditional payment methods are no longer satisfying customer needs.
With digital re-shaping our ways to pay, here’s our take on the digital trends that are set to shape the future of payments.
Today, banks and payment providers are faced with a tough balancing act. They must provide payment solutions that are simple for their customers to use, but that are also secure enough to keep criminals out. Indeed, security is becoming a priority for customers as financial scams become more prevalent and fraudsters’ methods more sophisticated. We're working with organisations nationwide in their InfoSec and Cyber Security as security becomes a core focus of business activities. In the payments industry we are likely to see the adoption of more advanced security features to validate payments. Keeping payments easy and accurate is at the heart of this, and a key way we can expect to see this delivered is through biometric security.
We’re already familiar with the biometric trend as we increasingly shop using likes of Apply Pay and Android Pay. A simple tap of the finger confirms who is paying in a fast, efficient manner. But this is only the first wave of biometrics. Iris recognition, facial recognition, and heartbeat analysis are just some of the more complex ways we may verify our payments going forward. The idea is already expected to be well received with customers as it omits the need to remember pins, submit codes, or rely on text messages from banks and payment providers. However, this will require organisations to upgrade their existing software to enable their customers to make payments using biometric authentication.
There’s no denying that we’re a society that’s attached to our mobile phones. And in recent years, we hardly need leave home with anything else. Gone are the days when forgetting your wallet was the end of the world. The efficiency and convenience that mobile payments afford means mobile banking and transactions are rapidly growing in popularity. Thanks to the development of new APIs, customers will benefit from increased functionality within mobile apps - and payments sit at the heart of this. Social media apps, for example, have now become shoppable with payments functionality built into their latest upgrades.
Codes replace cards
When making a purchase, customers are typically identified by the digits on their card. But more secure ways to pay are being introduced thanks to EMV technology. Instead of relying on a plastic card, bank accounts are linked to codes that change with each transaction. Because this code isn’t fixed, it helps avoid card skimming and cloning.
The new consumer
70% of Gen Z have dumped orthodox banking methods for more efficient and fast mobile banking. So as the new consumer, they are at the heart of all of these changes. This isn’t particularly surprising considering that they are digital natives so will naturally be the champions of user experience here. Having lived their entire lives in a technology-focused world, they are putting pressure on banks and payment providers to step up their game and offer both a secure and slick digital experience.
To hold onto the new consumers, banks and payment providers need to invest in mobile technology. After all, for this group, the most common - if not the only - way they pay is digitally. They’re also looking for discounts and rewards that can be accessed in the palm of their hands, along with increased flexibility and instant payments. Organisations must work to meet their needs now, or pay the price later with the loss of their loyalty. As this group will make up 40% of consumers by 2020, this is a risk banks and payment providers can’t afford to take.
The new consumer model is both driving the demand and shaping solutions for the payments industry. So it stands to reason that today’s emerging workforce are well-equipped to support digital transformation projects in banking and payments. Having grown up in a tech-focused world, they bring an implicit understanding of technology to their work. At Grayce, we bolster this inherent knowledge through our Development Programme. Over three years, Grayce Analysts gain the accredited qualifications, training and career-coaching to support the full breadth of your digital needs.
Grayce have partnered with public and private sector organisations since 2013, delivering change and transformation. Our growing Analyst Community are supporting cutting-edge change programmes in banking, cybersecurity, law, insurance, IT, retail - and much more. Working on industry-leading projects nationwide, Grayce Analysts add value from day one, and bring the adaptability that’s vital in the fast-paced, agile world of digital transformation.