Those in the banking business spend a lot of time talking about the rapid changes in the industry; not only regulatory changes but how technology is putting new demands on banks and credit unions at an ever accelerating rate. For a conservative industry that dislikes change, banking is being dragged kicking and screaming into the new tech-driven 21st century.
The reason for these rapid changes, of course, is customer demand. Consumers are becoming more tech savvy and more accustomed to using technology for transactions, from using services like PayPal for mobile and online transactions to using their mobile telephones to buy coffee at Starbucks. Tech makes these monetary transactions instantaneous, and instantly visible. Consumers expect technology to deliver transparency, and they are starting to expect the same kind of transparency and frictionless transactions from banks and credit unions.
In an article published by BAI Banking Strategies, Chris Skinner, chairman of the Financial Services Club, CEO of Balatro Ltd., calls this the evolution of the “intellisensing” bank. Greater connectivity is promoting real-time data access and increasing expectations for real-time banking. Consumers are expecting their retail purchases and online transactions to be updated on their accounts immediately, and retailers and commercial customers are expecting real-time bank balances to facilitate forecasting and cash flow. And these expectations will continue to grow with new technology. As Skinner writes:
“The thing that will take this beyond being just a real-time alert is the move to embedding technology capabilities into devices everywhere. Or should that be everywear? After all, we have just started to see the tip of the “internet of things” in 2013 with thermostats, cars and glasses that run on Bluetooth and Wi-Fi. In 2014, this will not be pervasive or predominant, but the idea of having more “intellisense” as everything becomes connected to the internet will be much more notable.”
As with the social media boom, consumers now expect to engage with their bank and the banking process, not just to be sold new services. That means a two-way conversation where consumers get real-time information when they want it, and in return, the bank or credit union senses what they need when they need it and proactively delivers targeted advisory services in real-time. Some banks are already pointing customers to new products and services based on their bank balance or other factors. For example, when a customer applies for a home equity loan it might be time to think about refinancing a home. Or when a customer walks up to an ATM and it shows a low bank balance, the system could recommend overdraft protection services.
Skinner predicts that this kind of intellisensing will become more prevalent over the next two years. Those financial institutions that want to stay competitive will have to find new ways to engage with customers and support two-way, real-time interaction and transparency. Winning hearts and minds, and wallets, will require a new level of customer service,and a new kind of openness that embraces members and depositors as valued customers.