At the heart of community banking are your customers. It’s likely that every decision made about the products and services offered centers around a positive customer experience — while at the same time attracting the next generation of clientele.
The customer experience is the culmination of a customer’s interaction with and perception of a particular brand. It’s how customers feel about what your brand offers and can be influenced by the experiences your business creates for your customers. It can include engaging with your product pages, the payments process, using the product or service, and interactions with customer support.
To stay competitive, it’s important to evaluate how customers engage with your brand, ensuring the way they bank and transact remains a convenient, secure experience. It is equally important that your software/service providers deliver an exceptional implementation experience, as well as the highest levels of customer support and service. Looking ahead, community bankers can expect to see a number of product and service advancements that complement their existing customer-centered offerings in 2024.
Below, we’ll explore a few of the most significant advancements that can boost the customer experience this year and beyond.
Mobile access and digital-first
The surge of mobile access through digital banking is reshaping how individuals conduct business and interact with financial institutions. Digital wallets enable card usage through a mobile device, allowing customers to make contactless payments and simplify transactions. Digital wallets are gaining popularity with consumers because of their speed and convenience, and additional digital wallet-based solutions are expected to emerge, especially in the digital identity space.
For financial institutions looking to expand their digital banking capabilities, several things have rapidly become the expectation: Enabling mobile access for both cards and accounts, allowing checks to be deposited remotely/digitally, and initiating payment transfers through alternate means besides the traditional ACH rails.
Access to a payments network that has open acceptance, is secure and user-friendly, and offers protection through best-in-class processing services that leverage fraud mitigation, including customer controls to limit access to their cards and accounts, is also critical.
Security and fraud prevention
Although rapid technological advancements have accelerated payments innovation, they’ve also created vulnerabilities that fraudsters can easily exploit. According to Experian’s 2023 U.S. Identity and Fraud Report, U.S. consumers lost $43 billion to identity theft and fraud in 2022. By leveraging innovations offered through artificial intelligence, financial institutions can implement more efficient fraud identification processes in the future. Choosing the right processing partner to tackle these fraud mitigation challenges is critical.
To stay competitive, financial institutions are looking for a secure payments network and processor that offers a wide variety of transaction capabilities and is open to a wide variety of customers, including merchants and business initiators.
Additionally, with biometrics emerging as one of the strongest customer authentication methods available, banks need a vendor that can accept a number of biometric authentication methods, including facial, fingerprint, optical and behavioral.
It’s no secret that AI in payments increases efficiency, lowers costs and provides loyalty-building customer experiences. These outcomes are possible, in part, because AI can analyze massive amounts of data in microseconds, speeding up transactions and processes while more effectively and accurately identifying markers and patterns indicative of fraud. With capabilities such as adaptive fraud analytics, transaction models are updated in real-time as fraud is identified. Benefits of such technologies include a broader interpretation of transaction history, more predictive transaction scoring, and reduced false positives and fraud loss.
Beyond advanced fraud detection, future AI innovations include advanced robotic process automation (RPA) capabilities that can improve customer service and create efficiencies to meet the demands of the highest service level agreements.
Immediate funds availability
Today, more than ever before, customers expect speed in every stage of a transaction. From same-day delivery services and two-day guaranteed shipping to faster in-person checkouts and instant payments, the quicker the service and transaction, the better for both the business and the customer.
The good news for financial institutions is new instant payments options are available to meet the growing needs and demands of their customers. Instant (“push-to-account”) payments represent a new “payment rail” in the U.S. Instant payments options include the RTP System, operated by The Clearing House since 2017, and the FedNow Service, operated by the Federal Reserve since 2023.
Both of these instant payments options allow large transaction limits, offer immediate funds availability to the payee, and instant interbank settlement between participating financial institutions, 24/7, within seconds of payment initiation. It’s important to note that in today’s high-interest rate environment, instant settlement, as well as instant funds availability, can be especially important for both financial institutions and their customers.
Paul Waltz is president and CEO of Johnston, Iowa-based SHAZAM, a national member-owned debit network, processor and core provider.