Human living went digital-first in the time it took COVID-19 to circle the earth once – about three months. It’s a fast and radical transformation that the post-2008 financial system was kind of prepared for. Server farms didn’t melt. The internet didn’t break. Life went on.
That digital continuity in the face of ruinous physical events changes everything.
In PYMNTS’ June edition of The Digital Payments In A Digital World Playbook done in collaboration with Wirecard, we learn that “digital shifts in regions like the EU and the U.S. are somewhat expected, with consumers in both [regions] more frequently interacting with financial and payment providers through digital channels. The COVID-19 pandemic appears to have strengthened this growth, however, exposing the number of consumers who already view digital payments as the norm and illustrating that such solutions must be sophisticated enough to keep their attention. One-third of those surveyed since the outbreak said in a recent study that they planned to up their digital and mobile banking tool usage, for example.”
How this plays out as financial institutions (FIs) throttle up digital innovation amid waning COVID panic forms the substance of The Digital Payments in a Digital World Playbook for June.
Evolutionary Forces Gather
“Shifting consumer and business approaches to financial products are driving permanent demand for faster and more flexible banking services,” Seth Brennan, managing director of Wirecard North America, told PYMNTS. “Digital payment technologies enable banks to meet evolving customer needs in everything from refunds and consumer incentives to [B2B] payments. Many of us are banking from our mobile phones these days. Sixty-three percent of consumers say they’re more inclined to try digital apps — a call for banks to offer more and better mobile-enabled services.”
On that count, the Tracker spotlights WSFS Bank and its contactless ATMs that use QR codes in place of button-pushing, as well as the handy myWSFS mobile messaging service. The key is to provide the customers with the choices and comfort level they want, delivered where they are. That builds trust.
“Strengthening customer trust requires secure, personal and easy-to-use payment portals and tools. Banks working with forward-thinking partners to meet these changing preferences are well-positioned to build strong, lasting customer relationships in our digitally transformed world,” Wirecard’s Brennan said.
Everyone’s doing it – including the big dogs like Mastercard. The financial services network says it plans to “…connect one billion individual consumers and 50 million SMBs to digital payment systems by 2025,” and that “its 2020 initiative was heavily influenced by the COVID-19 pandemic, according to company statements,” the June Tracker states. That effort extends to unbanked Americans, too, with Mastercard offering to “…collect their stimulus checks by allowing them to load the funds onto network-supported, prepaid debit cards. This will give consumers faster access by eliminating the need to wait for checks."
Giving People the Power
The digital-first banking movement was well underway before most people had ever heard the word “COVID.” Rapid adoption for damage control and continuity is now the mission.
As The Digital Payments in a Digital World Playbook states, “Eighty percent of Americans noted in February that they would rather use online banking platforms than visit branches, meaning consumers have been using such options long before stay-at-home orders required them to do so. The COVID-19 pandemic has removed the choice and forced FIs and customers to interact via digital platforms, though, and brick-and-mortar branches have become auxiliary services with limited use for more complicated financial tasks for those who remain branch-dependent.”
It now falls to banks, FIs and FinTechs to pull ahead of the digital shift by tracking mobile and real-time payments trends and innovate for the banking whims of post-pandemic America.