Changes in our behaviour and needs are shaking up industry after industry, year after year. We have already spoken about how consumer behaviour has changed the Travel and Food industries, and now we will run through ways in which consumer behaviour – and the way the industry is responding to it – is shaking up and beginning to transform the age-old consumer finance sector.
The Digital Migration
People from all walks of life have gone digital and the way they choose to bank is no exception. For instance, ‘2016 was dubbed the year of the mobile banking app’, with customers now craving streamlined, accessible services that are available at their fingertips. This even includes the older demographic, who is supposedly scared of emerging technologies. This year, Lloyds Bank has reported that 1.1 million more people in the U.K. now have basic digital skills and that the greatest improvement has been amongst over-65s.
It’s a necessary change. The days of waiting in line at the bank on a Saturday morning will soon be over, as will calling premium rate customer care numbers. More and more services are now available as apps and the introduction of mobile payment solutions like Apple Pay and Visa Pay is helping make the smartphone the one stop shop for all customers’ financial needs. Everything you need is in the palm of your hand!
The digital migration is forcing high street banks’ hands, with the need for a bank on every street corner reducing year on year. As people familiarise themselves with their own digital self-servicing, it is likely we will see the closure of smaller high street branches, making way for bigger, more strategically placed banks that serve a high concentration of people.
Artificial Intelligence (AI) is the technological innovation set to change the world. As reported in Forbes, by 2035 AI could double economic growth rates in 20 countries. Although we are still some time away from this happening, we are beginning to see AI move into the finance industry and affect how we bank and the new services on offer.
We recently told you how chatbots are revolutionising the way we book restaurant tables. Now chatbots are being incorporated into the finance industry to enhance our banking experience and make the process easy, quick and personal. In March of this year, for example, Capital One launched an SMS chatbot named Eno, which uses AI to respond to users’ text messages. It can also be used to check users’ account balance and request money from another account.
With 97% of smartphone users regularly using text messaging and the number of smartphone users hitting 42.7 million in the UK, it was only a matter of time before chatbots made their way into the consumer finance industry. As with all things AI, the service will only evolve and improve as it’s used; with every new user, Eno will be learning. Although current features are relatively basic, it may even be possible that chatbots will replace traditional customer service agents in the future.
Capital One has also made ground in the rapidly growing smart speaker theatre. Teaming up with the market leader, Amazon Echo, the bank has very recently released an app (dubbed a ‘Skill’ by Amazon) that can be downloaded and added into the Echo. Again designed to keep up with digital migration, it aims to make consumer banking easier and more frictionless than it has ever been before.
Here are just some of the commands Alexa can learn with the new Capital One Skill:
For your credit card:
- “How much did I spend at Target last month?”
- “How much did I spend at Starbucks last weekend?”
- “What’s my current credit card balance?”
- “When is my credit card bill due?”
- “To pay my credit card bill.”
For your bank accounts:
- “What’s my checking account balance?”
- “What are my recent transactions?”
For your auto loan:
- “What’s my car loan principal balance?”
- “What’s my payoff quote?”
- “When is my car loan due?”
- “To pay my car loan bill.”
For your home loan:
- “What’s the principal balance on my mortgage?”
- “When is my next mortgage payment due?”
- “How much is my next mortgage payment?”
Just speak any of these commands, and Amazon Echo will process them and give you the answer you’re looking for. Simple and frictionless, it’s the essence of what consumer finance brands are looking to do with technology in order to aid their customers and meet their needs.
The consumer finance industry is following a recurring theme we are seeing across many industries. Consumers who are craving instant and accessible customer service are leading finance brands to implement digital and automated means to satisfy demand. This is only a glimpse of what the future may hold for the consumer finance industry, and the opportunities from here on in are practically limitless.
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