From buying coffee to internet banking, online activity has a major role to play in shaping our lives. Computer advances and automated systems have enabled artificial intelligence to replace human intelligence, as technology becomes a major influencing factor that defines the success of companies and individuals.
With advances in internet speeds, the lightening fast rate of technology adoption and diffusion into society will continue to accelerate. A new breed of customer is emerging and is interacting with technology in a way which has given rise to a new audience of digitally connected people, who are starting to disconnect subconsciously from their everyday relationship with their High Street bank.
The typical laptop available in the current market offers limitless opportunities with enhanced memory and performance as fast as the speed of light, which quickly makes old fashioned models appear outdated. Computers cost a fraction of what early ones cost as far as computing platforms go. Apple sold more mobile devices in 2011 alone than all the Mac computers it had ever sold in the 28 years before. The increasing use of mobile devices, particularly smartphones, has been sparked by the growth of social networking sites including Facebook and Twitter. In fact 40% of UK adults access their Facebook profiles on the move according to latest figures from Ofcom. New technologies and software such as the iPod and Facebook are now being adopted by consumers en masse.
Frequently we see companies stepping into realms traditionally managed by the banks. Many mobile carriers are offering pre-paid mobile wallets systems, along with shops like Starbucks. More and more people are using pre-paid cards, and these products are understandably attractive to consumers, speeding up the payment process without requiring the issuer to have a banking licence.
For most of today’s customers, this kind of experience, involving face to face communication with a cashier behind a glass window, or at a desk with the “banker” is completely alien. Last year alone it came to light that the average time spent everyday on mobile phone apps was higher than the time people spent browsing the web on their computer. It wouldn’t surprise me if banking advice will in future reach us in real-time, via mobile devices.
The importance placed on traditional methods of banking is diminishing, as new mobile payment services penetrate the market such as the American company Square. Additionally, the Swedish firm iZettle, which has created a device allowing small traders to take credit card payments, is arriving in the UK after a positive launch in other markets.
Banks are adamant one-to-one advice is the main explanation for why people visit branches. Yet with current account margins so tight, there is less motivation for banks to spend money on providing customers with advice to keep them out of debt. Instead we see contactless payment systems emerging from many different fronts.
The turning point for these methods of payments is fast approaching but progress will be underpinned by banks’ ability to achieve this level of flexibility and a flawless service. It’s possible for financial advice to be pushed through to the payment device itself. Despite all of the astounding technological possibilities, the most successful banks will be those that become first class service organisations and who are able to deliver this service in a way that suits customers today.
Paul Hunt is managing director of Phoebus Software.
