Accenture Banking Blog

Payments companies have made big investments in omnichannel to support customers in stores, call centers, online and mobile. The irony is that omnichannel is rarely about customers. It’s usually about companies—their organizational structures and operations. But company-centric models are a death sentence in the digital world. Survival demands customer-centricity.

Experience is the new channel

Not only is experience the new brand, the way I see it, there’s no way to square being customer-centric with managing by siloed channels anymore. That’s why I proclaimed RIP to channels in my first blog a few months ago. Customers don’t think in channels. They demand seamless, no-brainer experiences. They want payments interactions agnostic of channel that embody the 4Rs of customer experience—recognize, remember, recommend and reward.

To deliver this, the industry must revisit a fundamental principle. Essentially a version of the “customer is king” maxim, it’s this idea: Whatever payments methods customers prefer will ultimately get widely adopted by merchants and payments players. From paper to plastic to mobile, we’ve seen this many times. It’s really very simple. Customers signal what they want, and the industry follows them there.

Over-indexing on the digital channel—and designing for digital now—is not just a sound strategy, it is the only strategy.

Follow customers to digital

So what do customers want today? Digital experiences, of course. I expect this desire for using digital to research, purchase and service products to grow steadily with advancing technologies and shifting demographics. The impact of Gen Z—the first truly digital-native generation—is already in play. Believe it or not, Gen Z will edge past Millennials as the largest global population segment next year.1

As they age, Gen Z will gain purchasing power, and with it, consumer influence. And unlike their parents and grandparents (and even Millennials), Gen Zers are all naturally hardwired for digital. Take their banking habits as an example. An Accenture survey of North American consumers reveals that 69 percent access mobile banking services daily or weekly. Compare that to 66 percent of Millennials, 47 percent of Gen Xers and 17 percent of Baby Boomers.2

But digital channels are not just for digital natives. Younger people are typically first movers in digital adoption, but older consumers tend to be close behind. Adoption is often a “fast follower” once older people get past a learning curve.3 Consider that according to this same Accenture survey, 13 percent of US Gen X consumers had used a mobile payments app daily or weekly in 2017. But 24 percent expect to in 2020.4

The digital hot list in payments

Payments companies ignore cross-generational demand for digital at their own risk. The reality is that consistently delivering the 4Rs of customer experience is not for the squeamish. It is hard work. But digital makes it easier. Digital payments provide a data-rich record of customer behaviors. This is previously unavailable, but invaluable, customer insight to inform more customer-centric experiences. And it allows companies to leverage this data, coupled with external data, to build a 360-degree view of their customers.

All of this means that over-indexing on the digital channel—and designing for digital now—is not just a sound strategy, it is the only strategy. Doubling down on digital accomplishes more than attracting Gen Z or Millennial customers. It’s a common sense move to meet the demands of all customers.

In fact, there are “non-negotiables” that payments players should invest in today to deliver on customers’ digital experience expectations. These include call-back customer service, in-app customer service, text-alert order status updates, text receipts and app-based account freezing capabilities.

There are also several emerging technologies to watch. Chatbots are first among them. These will be game changers. These AI-powered help desk assistants can streamline the entire digital payments journey. They can handle basic transactions, collaborate with human representatives, and interact in real-time to complete tasks fast. All of this goes a long way in removing friction from the digital channel.

More specifically, emerging technologies are also poised to streamline digital payments authentication and authorization. For example, digital identity verification can remotely capture a credit card applicant’s driver’s license. There’s also digital provisioning, which can create virtual accounts as temporary credit cards for online shopping. And voice authentication is most certainly the wave of the future in payments and proliferation of payments methods and on-ramps.

The future is the digital experience

As technologies like these advance, digital payments will explode with possibilities. I’m not suggesting that traditional payments methods will vanish cold turkey. Think of it this way. When television came to American homes in the 1950s, radios did not vanish altogether. But listening habits changed. And over time, usage and growth flattened until a new generation had little or no connection to radio.

We can expect a similar trajectory in payments. The pervasiveness of digital in people’s everyday lives will continue to drive people to digital commerce. What better reason for payments companies to stop focusing on channels and start investing heavily in their digital experiences today.

Please continue to read my blogs. Next time, I plan to explore the 4Rs of customer experience in more detail.

1Lee J. Miller and Wei Lu, “Gen Z is Set to Outnumber Millennials Within a Year” 8/20/2018
2Accenture, 2017 North American Consumer Payments Pulse Survey
3FinTech Futures, “The Forgotten Generation: Driving Digital Adoption with Older Customers” 8/31/2018
4Accenture, 2017 North American Consumer Payments Pulse Survey