Big Tech and FinTech firms are busy creating their own connected ecosystems while striking up relationships with banks, making traditional financial services firms part of the system, too. Google stands as a prime example, with Google Pay and Google Plex. And in other parts of the financial services landscape, FinTechs are trying to enable banks to become, well, more like FinTechs.
As the connected economy takes shape, banking, payments, commerce and merchant ecosystems are all striving toward linking up, communicating with one another through digital channels. And there’s a common point of contact: the customer.
Putting The Customer At The Center
In an interview with Karen Webster, Doug Brown, president of NCR Digital Banking, said that for banks and merchants, focusing on that commonality can turbocharge the omnichannel commerce experience, cementing individuals’ loyalty to merchants and financial institutions (FIs) in one seamless flow of data and interactions – from browsing the aisle (virtual and otherwise) to making the payment.
Data, of course, underpins it all, but getting it right – really crafting the ecosystem itself – depends on far more than the technical underpinnings of ensuring that information flows between parties. There’s any amount of competition to get that data captured and flowing, and to gain customers’ attention and share of wallet.
Breaking Down Silos
As Brown noted, value is unlocked when silos are broken down, and the consumer is at the center of it all. He said banks have a unique advantage in accelerating the evolution of connected commerce systems because they “oversee” consumer relationships within all parts of that ecosystem.
“If you ask who has the best position overall, I would vote for the banks and credit unions – because they are the stewards and trusted sources of data and information on the consumer,” said Brown.
With a wealth of data on hand about how individuals pay, and how they want to pay, the traditional FIs serve as a fount of insight for retailers. But up until recently, sharing that data has been a challenge.
Retailers and banks have not exactly been digital-first verticals – they’ve relied on physical branches and brick-and-mortar establishments – but the great shift wrought by the pandemic has forced them to increase their reliance on digital channels to engage with their end customers.
“What we’re seeing now, more than ever, is that digital-first need not mean ‘digital-only,’” said Brown. “It’s a digitization of the whole experience, wherever it happens. We’ve seen it in retail, and most recently with restaurants, with order online, pick up at the curb. We’re seeing banks embracing that model, too,” with contactless interactions at the ATM, for example.
Along the way, said Brown, all stakeholders – especially banks and retailers – are grappling with the challenges of cybersecurity, data protection and even getting more fully online in a streamlined manner.
Partnerships can help enable and expand that digital presence. Brown pointed to NCR’s acquisition earlier this year of Terafina, which, billed as a digital-first banking platform, helps with account opening and onboarding across digital, branch and call center channels.
Beyond The Tech
But bringing together those far-flung parts of the ecosystem, said Brown, involves far more than just getting new technology into place. As new models evolve, another hallmark of the connected economy has been, and will be, collaboration.
Connections across payments, commerce and banking, he said, hinges on cooperation and shared incentives between banks, retailers and their customers, in a coordinated model that taps the value and unique delivery conduit of each of those entities.
There are different modes of incentives, Brown noted. There’s the classic rewards model, which can lure consumers with discounts, but the digital age can enable a “blended experience” that benefits everyone – the timely payment helps the merchant, the reward is savored by the consumer, and the bank gets the benefit of increased transactions.
“This is where the power can be unleashed when brought together more deliberately between banks and retailers,” he explained. “You get credit for being a great, loyal customer, and the service handling aspect is improved.”
Collaboration has an inherent advantage in making sure that firms’ efforts are not duplicative, and that the consumer feels comfortable that their data is secure and their time spent on an app – or omnichannel retail experience – is both valued and economized.
A few years from now, Brown said, we may be talking about neural banking – but along the way, he predicts that we’ll see a rapid acceleration of demand for digital journeys from consumers, faster technology enablement (particularly with Cloud API) and the connection of ecosystems that not all that long ago did not seem possible.
“The world is wide open,” he said of the joint and mutually beneficial relationships between banks and retailers. “And as we look at the horizon, it’s going to get pretty interesting.”
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