According to a new Global Payments Insight Study conducted by ACI Worldwide, financial institutions may have a real reason to worry due to a significant shift in consumer expectations and increased competition from new market entrants.
The study was conducted via a digital survey provided to key payment decision-makers all over the world during the fourth quarter of 2014. The survey sought to provide a glimpse into payment perceptions among financial institutions, scheduled billing and payment-taking organizations, consumer finance and insurance firms, and merchant retailers, the company release said.
Results showed 75 percent of the respondents expressed concerns about a decreasing customer base if they were unable to meet the demand for more payment choices.
The respondents’ answers fall in line with one of the study’s main takeaways, the growing importance of the customer and the centrality of enabling an enhanced experience. While many payments providers are beginning to introduce expanded services or loyalty and rewards programs in order to keep consumers’ attention, the survey results show that power may lie in the actual payments offerings of a provider.
“For banks in particular, the window of opportunity is likely time restricted. Although they remain, for the time being, perceived as the most capable providers of a range of payment technologies and tools, they risk losing this incumbency if they do not adapt to rapidly shifting market demands for better, more varied payment services,” ACI Worldwide stated in The Future of Payments 2015: Financial Institutions report, which provides details on the survey findings.
Put simply, the payments industry is at a crossroads, where the customer is now king. The report urged financial institutions to ensure customers are a top priority by investing in payments capabilities in order to effectively compete in the changing marketplace.
“One potentially critical strategy is through the implementation of real-time payment capabilities. Financial institutions have a natural incumbency, and by forming direct connections and introducing real-time capabilities, this has the potential to solidify their positioning long term,” the report explained.
Other principle findings from the study include:
- 76 percent believe their payment services face growing competition (from new, smaller and more nimble players)
- 55 percent cite that an enhanced customer experience is their key expected ROI on any increase to their payments investment
- 60 percent of retailers report their payments provider does not offer the variety of services required to satisfy customer demand
Overall, a total of 1,119 executive respondents across 15 industry sub verticals in 25 key global markets took part in the study, resulting in over 144,000 separate data points on perceptions and expectations across the payments landscape from critical financial institutions globally.