The digital transformation of our holiday shopping season


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(EastBanc Technologies) – The term ‘digital transformation’ is used a lot in business, and although the concept has been around for years, it is more discussed today than ever due to the COVID-19 pandemic. Digital transformation describes the adoption of software by a business so that it can quickly adapt to business and market changes and stay competitive in a rapidly changing landscape. Local physical stores opening e-commerce websites to sell products and services online, restaurants introducing online ordering capabilities for take-out, and local attractions such as zoos and museums adding reservation tools online and virtual tour options at their websites are all examples of transformation into action.

Most sectors of the market have been impacted by digital transformation, and the financial services industry is no different, with traditional providers, such as retail banks and credit unions, evolving to enable customers to access to their accounts and to pay for services rendered quickly and securely via the services. that they use every day, from carpooling apps to digital wallets. The pandemic has forced financial services companies to act quickly and, as a result, has opened the door to new and improved digital experiences that consumers believe are here to stay.

As consumers prepare for this year’s ‘new normal’ holiday season, read on to learn more about three of the top trends that today’s innovative financial services companies are supporting over the holidays – and on the go. beyond – to stay competitive while helping consumers easily manage their finances, stay safe and shop securely.

Contactless payments

The adoption of contactless payment options exploded during the pandemic as consumers sought to distance themselves socially and limit close contact with others in stores. In fact, 70% of merchants in the United States say their customers are requesting tap-and-go or mobile app payment options due to the pandemic (American Express, 2020). With contactless payments, consumers avoid using physical money or inserting a credit card into a kiosk by quickly putting in a physical card, wearable device, or smartphone with RFID technologies ( RFID) or near field communication (NFC) to a payment kiosk. This fast and convenient payment option is not going to go away either; nearly half of global consumers (46%) have switched their usual credit card to one that supports contactless payments, and 74% say they will continue to use contactless payment options after the pandemic (MasterCard, 2020).

Integrated payments

By pushing contactless payments even further, consumers can expect the process of using their bank accounts on the go to purchase their goods and services to become even simpler and more streamlined as more and more people of brands offer mobile app experiences and integrated payment options. Much like taking an Uber or shopping for groceries through Instacart, in-app payments are made automatically after service is complete and without having to swipe a credit card or even touch a smartphone to a kiosk. More generally, integrated finance, or integrated banking, is an emerging opportunity for financial services companies as the segment is expected to reach a turnover of 230 billion dollars by 2025, an increase of 10 times compared to 2020 (Capital of Lightning, 2021).

Transparent omnichannel shopping

More than half of U.S. consumers (58%) are more comfortable shopping in stores today than they were a year ago, as vaccines are now widely available (NPD Group, 2021). Coupled with today’s online shopping habits, hybrid shopping activity adds complexity to financial service providers. For example, consumers can make a purchase at a physical pop-up store by scanning a QR code at checkout. They may later want to order more items from this pop-up store and do so through the store’s e-commerce site, as they are no longer shopping. Payment providers and banks need to make sure they add no friction at the time of purchase, whether it’s knowing when to report a potentially fraudulent transaction or processing payments immediately.

None of these capabilities are possible without sophisticated technological systems operating in the background that connect financial services companies with retailers and payment infrastructure providers. Agile software development processes are essential for financial services companies to ensure that they can introduce new functionality for customers with control and the ability to iteratively test and improve them without disrupting the experience. . Digital products and services also require a cloud-based infrastructure to provide flexible support using application programming interfaces (APIs), scalability through container orchestration if desired, and increased security. With these layers in place, financial services companies will be able to organize and analyze data illustrating usage, issues, and opportunities, as well as automate personalized experiences and features using of artificial intelligence.

The pace of innovation resulting from digital transformation is not going to slow after the holiday shopping season this year or anytime soon, as consumers are now accustomed to more convenient and personalized experiences. While this is great news for consumers, the pressure has never been greater for financial services companies to evolve their legacy systems, adapt their business models and align with partners to seamlessly support customers wherever they manage their finances and spend money, in person and digitally.

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