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Michael Worledge, Head of Financial Services Research at Harris Interactive explains what brands should know about digital transformation in financial services.

Faced with layoffs, job uncertainty, and an economy in flux, consumers worldwide have become far more conscious. They report thinking more about saving and budgeting than they have in the past, and many have prioritized sound investments with well-known providers. At the same time, their once-low confidence around spending is seeing a slow and steady increase.

Recent data shows that consumers are at a point where they’re ready to spend—and save—more. But what about how they’re doing it, and the role that digital financial management plays?  

Let’s look at where consumers are with this digital transformation right now, according to real-time data from our UK Financial Services Sentiment Indicator tracker and our wider Global Barometer. This is especially important for brands because the more understanding and data you can put behind the answer, the better informed your decisions become—and the lower the risk attached to it.

Financial management is forever changed with a rise in “digital first.”

The financial landscape is changing in terms of consumer engagement with internet banking, online payments, digital wallets, and other elements surrounding the transition from traditional to digital financial management.

Digital options play a much more prominent role in normal life than they ever have before. Between the pandemic limiting the ability to visit branches in-person and the resulting pressure on call centres, many have decided that the most remote option is safest. 

As a result:

Nearly half of consumers have been influenced by the digital transformation so much in the past year that their behaviour has changed significantly—and, most likely, permanently.

Different age groups show different comfort levels with managing finances digitally

The pandemic forced the adoption of digital alternatives to in-person banking across the board. But just because digital financial management has become far more common doesn’t mean that it has been as easily adopted for every demographic. 

While more than half of consumers ages 55+ say they’re comfortable using self-serve, online-only channels to manage their finances, they show more hesitation over other aspects of online money management, including:

Still, 40% of respondents from each of the three age groups studied here all agree on the importance of having physical bank branches—an area where the 55+ demographic is right on par with those ages 18-54.

Digital wallets are becoming more popular

It’s important to remember that consumers can use digital in their daily lives without having to log into providers’ apps and websites. This is evident at checkout, where more consumers are reaching to pay with their phones instead of their wallets. That’s because digital brands are connecting with customers through the digital wallet, as with Google Pay, Apple Pay, and more. 

In fact, the data shows that digital wallets are becoming a way of life:

The digital wallet has become a key part of life as smart technology becomes the new normal in activities, financial management, and even in communication via apps like WhatsApp.

Regardless of digital options, consumers support brands that align with their values

Values are of core importance to today’s buyers; they want to know what the companies they’re supporting stand for. This is so crucial, in fact, that:

Regardless of providing digital options that offer convenience, security, and peace of mind, it’s more important than ever for brands to stand for something and to clearly and continually communicate this to customers. Only a quarter of consumers say they’ll keep supporting brands whose priorities don’t align with their own.

As the data shows, digital is here to stay—and its importance continues to gather momentum across countries and profiles. Brands must stay on top of these ever-evolving trends to make lasting, meaningful connections with their target audience.

To learn more about how you can aid your New Product Development, download our latest eBook guide here

What exactly is Bitcoin? 

Bitcoin is a very popular crypto that was created in 2009. Because Bitcoin is a digital currency, it cannot be physically used. Many people see this cryptocurrency as an excellent investment. Some supporters even believe that it could be the currency of the future. There is a limited supply of Bitcoin, and no more will be created after about twenty years, so having it can be a great idea. Some people say that the government will be able to purchase it one day. As a result, these limited Bitcoins of yours may be in high demand. In any case, never invest more than you are willing to lose. 

How does Bitcoin function? 

Each Bitcoin is a computer file that is stored in a device known as a “digital wallet.” Every transaction is recorded in a public list known as the blockchain. The main thing most people are really interested in – is it secure? Because every transaction is publicly recorded, it is extremely difficult to create fake Bitcoins or spend ones you do not own. However, you could lose your wallet or delete your crypto and lose it forever.

Let’s go back to advantages now and start by saying that Bitcoin is decentralised and digital, which means that with it people have the freedom to exchange value without the use of intermediaries. Bitcoin is faster, more secure, and less expensive.  This is the main reason why many people use it to buy everyday utilities. For example, you can even buy a variety of gift cards with Bitcoin including gift cards for Airbnb, PlayStation and even Walmart. Basically, banks control cash, whereas Bitcoin has owners. Also, it is very important to mention that there is no way to duplicate a Bitcoin. It is a global digital currency. There are no exchange values or third-party interventions. Bitcoin enables cross-border transactions by maintaining a ledger on the backend. Also, when you pay in cash for goods, your bank can track the transactions. When using a credit card, you must provide personal information. Bitcoin, on the other hand, allows users to remain anonymous, which means they do not need to share financial information. Let‘s not forget that you can send Bitcoins to the recipient in a matter of seconds with the help of a Bitcoin wallet. These cryptocurrency transactions are irreversible, and they cannot be cancelled. Also, it is important to remind you that customers are charged high transaction fees by the majority of credit card companies. You must also pay overdraft and minimum balance charges. To avoid all of these fees, you should consider using Bitcoin.

As you can see, Bitcoin has loads of advantages over traditional payment methods. It is secure, less expensive, faster, and banks have no control over it. Also, it has very low fees, so if you want to avoid high transaction fees, overdrafts, and minimum balance charges, it may be a good idea to buy some cryptocurrencies. But in the end, it is all up to you to decide if you really want to use it. Do not forget that you can always have both of them – cash and cryptocurrencies at the same time.

Gen Z (age 4-24) represent a fundamental break with every generation in human history – they've never lived in a non-digital world. Their attitudes are different to older generations, giving us a sneak peek into the future of human behaviours. Motie Bring, General Manager for Global eCommerce at Worldpay Merchant Solutions,

Gen Z’s stature, spending power and influence will grow as they enter the workforce and their predecessors head into retirement. As the generation whose behaviours will reshape commerce over decades to come, their importance to global retailers cannot be ignored.

Organisations need to implement both immediate and long-term strategies that ensure they’re being heard, with attention to three key areas.

Be Personal and Authentic

Rapid urbanisation, population growth, and the rise of mobile and online commerce has fundamentally changed society’s notion of individuality. Shoppers have swapped in-store experiences for the speed and convenience of shopping online. But, more recently, we are seeing Gen Z consumers placing a renewed focus on the individual and rekindling the one-to-one roots of commerce. For this demographic, one size doesn’t fit all: Gen Z are looking for personal experiences that fit their values and lifestyle and keep them excited.

Fused with the data that makes personalisation possible, technology is powering the possibility of one-to-one customer experiences in the digital age. Mass consumer culture doesn’t sit well with a generation that is immersed in individual expression. Retailers are moving away from talking to segments to focusing on people.

According to findings from the newly released Worldpay from FIS 2020 Global Payments Report, 60 percent of Gen Z believe that it is important for brands to value their opinion. 35 percent feel their favourite brand understands them as an individual.

Gen Z have a healthy sense of skepticism and so it is critical for brands to be authentic. Learning how to navigate the world in the era of “fake news” and having their digital lives saturated with messages of questionable quality and authenticity makes Gen Z discerning critics. They recoil from brands that fail to adhere to their values.

According to findings from the newly released Worldpay from FIS 2020 Global Payments Report, 60 percent of Gen Z believe that it is important for brands to value their opinion.

Provide a Mobile Friendly Experience

Brands seeking to earn the favour of Gen Z will need to cater to their payment preferences. Like the generation itself, Gen Z’s payment preferences are more digital, more social and more mobile-focused than any other generation.

Gen Z uses digital services and mobile wallets more frequently than their predecessors. Over half use digital wallets at least once a month, three quarters use a digital payment app from financial service providers and others, while 79 percent use peer-to-peer (P2P) payment apps at least once a month. Digital access in the United Kingdom is very high: internet penetration in the country is one of the highest in the world at 95 percent of the population, according to the Worldpay from FIS 2020 Global Payments Report.

Accepting a range of smartphone-based digital wallets is vital to serve a generation that has largely bypassed using plastic cards as a payment method. Tailoring the right mix of digital wallet acceptance is key. Although globally recognised brands have proportionally large share, digital wallets are resisting homogenization with local and regional alternatives thriving around the world.

Innovate for a Hyper-Connected Generation

Gen Z isn’t instinctively drawn to the same banking, payment and investment tools as their parents’ generation. They want financial products and services that deliver practicality and convenience. Gen Z consumers are also savvier on what companies can deliver, and increasingly expect the same level of experience regardless of whether they are shopping on Amazon, ordering a pizza, or liaising with their financial service provider.

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From peer-to-peer services that are increasingly being accepted for business-to-consumer transactions, to direct debits; from checking to satisfy recurring payment arrangements, to purely digital banking services: Gen Z is ready and eager to engage with cutting edge financial services and payment innovations.

Alternative financing options that emphasise shorter flexibility—such as “buy now pay later” services find themselves fitting with generational need. According to the Worldpay from FIS 2020 Global Payments Report, these trends are on the rise in the United Kingdom: these payments are expected to grow 39 percent annually and are on course to double their global market share by 2023.

Establishing meaningful connections with Gen Z is a long-term approach, but one that requires focused attention. Merchants seeking success must explore how they can formulate and implement strategies with appropriate care, yet with the urgency that Gen Z increasingly expects.

About the Data

Figures quoted are taken from data published in Worldpay from FIS 2020 Global Payments Report unless otherwise stated or referenced. For research methodology, please refer to page 128 of the report.

Money is a sensitive subject when it comes to the legal world. This is why governments are having a difficult time adjusting their policies to allow the utilization of emerging technologies to enhance traditional financial services. Add to that the boundless possibilities and unexplored scenarios of the results of adopting these technologies, then you have more people opposing the idea instead of championing them.

For instance, many proponents have shown the superiority of using blockchain technology in carrying out cheaper and more secure financial transactions through cryptocurrencies. But until today, most governments still don’t know how to respond to the growing market.

The challenge now lies with traditional finance companies who can only benefit from using these technologies for more efficient systematized operations. If these organizations can adopt these tech while assuring the authorities about the consistent quality and security of the service, they can help speed up the changes in the existing guidelines and policies.

This infographic by Prototype discusses the various technologies that are disrupting the financial industry.

As contactless payments go from strength-to-strength and competing digital wallet options are rolled-out by everyone from the giant tech companies to mobile operators, the number of articles and experts publicly heralding the imminent onset of a ‘cashless society’ increases proportionally.

From the latest tranche of predictions, the country cited as leading the current all-digital currency race appears to be Sweden (ironically the first European country to issue banknotes back in 1661). Here cash payments accounted for just 2% of the value of all transactions made in 2015, and electronic payment optimists are forecasting a cash-free society as early as 2020. It’s also the country where protest continues at the decision to no longer accept cash on the capital’s Metro, and where cases of electronic fraud have more than doubled in the last decade.

There’s certainly no denying that new digital payment technologies are gaining traction, but those promoting this as evidence of the imminent arrival of cashless societies should, for want of a better phrase, ‘take note’.

IOU deja-vu

Back in the early 1950s, around the same time the very first Diners Club Cards gained popularity across the US, the vision of a cashless society was enthusiastically predicted. More than sixty years later, cash payments still account for 85% of all global retail transactions by volume.

Beyond the hyperbole, often generated by those with digital payment options to sell, the common-sense prediction for the future of cash is probably that, while the world will inevitably evolve beyond physical currency at some point, it’s more likely to happen sometime in the next century than the next decade.

The immediate reality is far more likely to be a future where, while cash is no longer king, it becomes a facility regarded as a fundamental part of our suite of payment options, sitting alongside contactless cards, eWallets and mobile payments, each ready to be used in the most convenient instance.

Show me the money!

Using cash in this context is far from archaic. Even today, cash is the fall back that always works. What do you do when it’s time to settle the restaurant bill but the chip-and-PIN machine’s broken? Work off your debt in the kitchen – or pop over the road to the ATM? Cash is the only format familiar to all purchasers, regardless of age, affluence or technological awareness.

Furthermore, the physical act of exchanging money can feel secure, and manageable.

Taking out cash for the week or month can help households to budget, and the act of handing money over still allows many consumers to better visualise their budgets and keep track of what they’ve spent.

This is supported by a recent survey taken by price comparison website GoCompare, in which 15% of respondents expressed concern that digital payment systems encouraged them to spend more than they should, with a further 7% stating they didn’t connect spending in this way with ‘real money’.

In an age of increased public surveillance and electronic monitoring, cash also offers a level of anonymity that many people are reluctant to give up. In a survey recently undertaken by Cartridge Save, 70% of Britons said they would be unhappy with government agencies being able to track every single payment they made.

Cash is staying – so let’s deal with it

As much as retailers enjoy the convenience and benefits of digital payments, for now, cash is here to stay. In fact, there’s never been more of it in circulation, and far from becoming a transactional default relied on by less sophisticated nations, the world’s most cash intensive economy is Germany, where it still accounts for over 80% of all payments made.

Responding to this reality intelligently on behalf of modern retailers, demands methods for the effective management of cash in the omni-channel world. Acknowledging that its physical nature means processing cash efficiently requires extra levels of logistics and supply chain management.

Optimising this Retail Cash Chain enables retailers to accelerate the speed of cash through their operations, from the customers’ point of purchase to the deposit in their bank account. Applying techniques to authenticate, secure, automate and accelerate within this Retail Cash Chain realises significant benefits, ultimately optimising the levels at which the value of cash can move, far beyond its apparent physical limitations. In other words, reaching a point where cash transactions become as expedient for retailers as electronic payments.

Physical currency may be one of the world’s oldest methods for making a purchase, but that doesn’t mean the way it’s handled shouldn’t employ the best of 21st century technology and innovation.

 

About Siôn Roberts:

In his role as EVP Global Retail, Siôn is responsible for defining and delivering Glory Global Solutions' Retail Strategy worldwide. He has over twenty five years’ experience in the Information Technology sector, most of which has been gained selling and delivering technology based solutions within the international Retail Industry, specifically store solutions.

With an MBA from the University of Liverpool, Siôn originally started out as a Software Engineer in Point of Sale and retail store systems. Siôn has successfully held roles across technical/development management, consulting, sales/marketing and commercial/executive roles within a number of large and small global organisations. Prior to joining Glory Global Solutions, Siôn was Group CEO at software consulting firm Ivar Jacobson International, and has previously worked for Electronic Data Systems (a division of HP) and ICL (now Fujitsu Services) in senior international management positions. At Fujitsu he formed a new global business unit focused on in-store interactive technology and electronic/mobile commerce.

 

 

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