Our recent article on Finance: How Challenger Banks are Leading the Revolution got us thinking. We cited five of the main ways that challenger banks are making a difference and disrupting the banking industry as:

  1. Flexibility towards customers needs
  2. Mobile app centred
  3. Building innovative technology
  4. Transparency
  5. Adopting more efficient business models

But how does this tie up with what banking customers actually want? In fact, do we really know what they want?

Interestingly, a recent online global survey from ACI Worldwide and YouGov gathered data from over 9,000 consumers in the US and Europe about the services that consumers say they want from their banks. The results of the survey have been broken down by region, which makes it possible to identify what UK customers are saying they want from the banking sector.

The main findings for what UK customers want are as follows:

  • 52% said they would like to see more loyalty discounts and offers
  • 38% would like better security and fraud prevention
  • 36% would like real-time banking services
  • 25% want more control over their banking services (eg disabling a payment card or setting their own contactless limits).

Some interesting food for thought there: and what is even more exciting is that many of the items on the above wish list may well be achievable through the Payment Services Directive (PSD2)

Payment Services Directive (PSD2)

On January 13th 2018, the new European PSD2 regulation takes effect. PSD2 is an EU Directive that regulates organisations that provide payment services. It opens up the facility for new financial service providers – including banks, building societies, payment institutions and e-money institutions – to access consumers’ banking details (providing that they have their consent).

The financial service providers are expected to be able to use this facility to offer an innovative range of new services aimed at helping consumers to better manage their finances, make online payments more easily and safely, and save money by finding better deals. One of the ways this will be achieved is by account aggregation services which bring all of a consumer’s bank account data together in one place.

However, in order to achieve any of these new innovative practices, it is necessary for consumers to agree to share their data with the finance service providers. According to the ACI Worldwide and YouGov survey, 55% of UK consumers are already amenable to the idea of sharing their data. They did, however, caveat that by saying that they would need to better understand what is done with their personal data and how well it is protected before they use these services.

Commenting on this development, Lu Zurawski – Practice Lead EMEA, Retail Banking and Consumer Payments, ACI Worldwide – said: “The data suggests that we have reached a tipping point at the intersection of technology and financial services where the majority of consumers now trust technology enough that they want it to enhance their financial lives. “

Quite how sharply this intersection does tip remains to be seen, and the financial services industry will need to work hard firstly to educate consumers about how to take full advantage of all the new financial service offerings, and secondly to provide genuine assurances that their personal information is safe.

But the positive thing is that the majority of consumers are at least open to the potential of this new disruption, and can hopefully envisage that it is a way of providing some of the facilities that they said they wanted in the ACI Worldwide and YouGov survey.

Preparing for PSD2

If you are in the financial services industry, you should already be in the midst of preparing for PSD2. Not doing so could result in valuable opportunities being missed. You need to consider whether:

  • you need to change your products and services strategies as a result of PSD2
  • your technology and data capabilities are up to the job
  • you have sufficiently robust cybersecurity and privacy measures in place
  • you can demonstrate compliance with current and future payment services regulations
  • PSD2 is likely to impact the current business model and tax structure of your organisation

If you need further help and advice as to how to adapt your digital marketing strategy to fit the demands and changes that PSD2 will bring – and to convince consumers that you are listening to them and will give them what they want – then do get in touch with us at Xcite Digital to see how we can help.