For financial institutions (FIs), payments are top of mind.
As noted in the most recent edition of the Innovation Readiness Playbook, the majority of FIs — at 57 percent — say that payments technology remains on their innovation roadmaps for the next three years.
And in a PYMNTS interview with Karen Webster, Janet Monroe, head of global client success at i2c, said the focus on payments technology shows a shift in how FIs are approaching relationships with consumers in general.
Historically, she said, financial services companies spent a significant amount of effort on card products themselves and defining the features that tied into those cards — among them annual percentage rates (APRs), benefit programs and loyalty points.
“But now,” she told Webster, “the market, and the needs of the consumer, are changing.”
To be successful in today’s environment, said Monroe, “FIs need to start looking at the full payment experience because their customers are doing just that. The customers are savvier, and they’re looking for more from their card than just basic features.”
As to what those end users are seeking, as recounted by Monroe: They want convenience, speedier transactions and an omnichannel experience.
The experience becomes especially important, she said, as the actual tangible act of presenting a card (you know, the plastic or metal kind) is receding a bit.
“The engagement mode is changing,” and consumers want “hyper-responsive interactions” with merchants, she said.
It should be no surprise that they want to have their preferred methods of payments accepted with ease at those merchants, too.
At the point of sale, said Monroe, the interaction can be mutually beneficial, as merchants can offer coupons or promotions, targeted to the consumer based on buying behavior and patterns.
To provide such flexible and timely responses to what consumers want and need, on-demand, FIs need to have the technological infrastructure in place that can support the constant drive to be innovative. The FIs need to be able to track and turn that consumer-focused data into action. Against this backdrop, she said, investing in data analytics becomes crucial — and artificial intelligence is a big part of any data analytics investment roadmap.
Getting the right infrastructure in place to make that agility a reality is easier said than done.
As Monroe said, speed to market is negatively affected when FIs cobble legacy solutions over the years from a series of acquisitions. Trying to deliver new products and services can be difficult when they have to be distributed across a set of less-than-optimally deployed platforms.
The User Experience
In short: It’s not enough to have an attractive interface — that interface needs to function.
The user experience has evolved and it's become more complex, said Monroe, so much so that it has become a “value exchange” rather than just a payment transaction. To enhance the value inherent in interactions between stakeholders in a transaction, she said, technology has to be in place that integrates all the moving parts of that interaction.
Thus, FIs have been focused more on infrastructure, which she said has never been the glamorous side of the business.
Nonetheless, said Monroe, FIs are coming around to an understanding of where their next investment needs to be made to have maximum impact across their various programs.
Looking ahead, said Monroe, FIs, eyeing the limitations of their in-house legacy infrastructure, may look toward partners who can provide flexibility and have their internal technologies in place that can help more traditional FIs bring their products and solutions to market more quickly than otherwise might be done. Besides, she said, FIs can focus more on their core competencies if they strike robust partnerships that can address legacy technology limitations.
“It’s a bit like changing the wheels on a moving vehicle,” she said of the changing payments landscape, “it’s hard to do and you’ve got to look for other alternatives, and so a lot of FIs are starting to develop creative partnerships to achieve their goals.”
For the FIs, focusing on technology can help raise the bar for innovation and create healthy competition, she told Webster.
“I think there will be a lot more innovation in the industry with even more creative solutions and features being applied to the value exchange,” she said.