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Lost in Transaction 2022: 5 key findings from our latest research on consumer payment habits



Chirag Patel, CEO of Digital Wallets at Paysafe.


How has the skyrocketing cost of living changed customers’ payment preferences? What are their expectations moving forward, and how do they fit with the payment trends we’ve been observing over the past few years? In April this year, we interviewed 11,000 consumers in 10 countries across Europe and the Americas to find out.

Here are the five key take-aways from that research.

1. Customers want more control over their spending

With most households tightening their belts due to soaring prices, consumers are reconsidering how they pay online. 44% of respondents have changed their habits, with the majority switching to payment methods that track spending more accurately.

Of those who have changed the way they’re paying, debit cards are the most preferred online payment method overall. 59% of respondents paid with a debit card in the month prior to taking our survey — a 5% increase over 2021. Digital wallet use has also increased, two fifths (41%) are using them more than they did a year ago. 16% of those who changed their payment methods are paying with crypto more often.

By contrast, credit-based payment methods are trending downwards, with one notable exception: credit cards. With overall usage standing at 51%, credit cards remain the second most popular payment method for online purchases after debit cards. They’re also the preferred way to pay when the purchase is a long-haul flight, holiday, household appliance, or other big-ticket item.

2. Cash is going digital

While a majority of consumers (52%) are using it less often, cash is alive and well.

31% of in-person transactions are still paid in cash. More importantly, 59% of respondents think cash is the most reliable form of payment. And 70% would be worried if they couldn’t access it anymore.

But the biggest signal cash is here to stay is its growing prominence as an online payment method.

Over the past 12 months, eCash payments — online transactions paid in cash — have increased. More to the point, 47% of respondents would prefer to make online purchases in cash, and 44% would buy online more often if they could pay in cash.

While our survey stopped short of asking respondents to explain the reasons for their desire to pay online in cash, the cost-of-living crisis is likely a factor.

26% of those who have changed their payment habits due to inflation are using eCash more often. This suggests they may be using it to rein in their online spending.

Consumers are also more aware of online fraud than ever, and far less willing to take chances. eCash can provide an added layer of security by making it possible to pay without sharing any sensitive financial details.

3. Online safety comes first, but not if it entails more friction

For 44% of respondents, security is the primary consideration when choosing how to pay online. This evidently needs to be addressed upfront in order to drive the first transaction. 70% also prefer not to share their financial details, and 62% would worry if they weren’t asked for any security information before completing payment.

But while security is undoubtedly top of mind for most customers, that’s not to say they’re prepared to jump through an infinite number of hoops if this made online commerce safer.

44% are happy with the current balance between security and convenience, and 23% would accept additional security measures only if the inconvenience were minimal.

4. Embedded payments’ potential is still largely untapped

Embedded payment technology, which enables non-financial brands to integrate  payments into their user journeys, has attracted huge levels of interest in 2021.

Our research confirms its incredible potential, but even though many consumers have probably used embedded payment technology, 49% haven’t heard of the term.

The good news is that 31% can see themselves using embedded payments within the next two years if they learn more about the technology and it becomes more widely available. The 51% who have heard of the term also feel positive about embedded payments, with the majority believing they’re safer than traditional payments.

Given consumers’ lowering tolerance for risk and their unwillingness to accept more friction, embedded payments are a huge opportunity. By educating their customers about the technology’s benefits — particularly how it can strike a better balance between security and convenience — merchants can boost trust and increase loyalty while building a healthy new revenue stream.

5. Neobank adoption has reached a tipping point

After a challenging period in the early stages of the pandemic, neobanks are back on track. App downloads spiked during 2021. And around half of the consumers we surveyed— 49% — are considering switching to a neobank.

Now that the bulk of everyday banking happens online, regardless of whether you use a neobank or an incumbent, it looks like customers increasingly perceive neobanks as being better value and more attuned to their needs. The most common reasons given for preferring neobanks to incumbents were that they have lower fees (41%); their apps are better (41%); and they have features that help you stay in control of your spending (40%).

But while neobanks have never been closer to mass adoption, they still have work to do. According to 57% of respondents, incumbents still have the edge when it comes to customer service. And while being digital-only may no longer be a deal-breaker, consumers are still worried about managing their finances entirely online, handing over their personal data, and not being able to deposit cash.

What’s next?

With inflation projected to rise further, customers are likely to become even more selective about how they spend their money online. At the same time, they’ll also continue expecting to pay securely with minimal friction. A great, streamlined user experience is table stakes.

From a merchant’s perspective, it’s clear offering a broader mix of payments, including eCash, is a must. Customers want more flexibility and control. And forcing them to use a particular payment method simply won’t cut it.

Crucially, to build stronger, lasting relationships, merchants have to engage and educate customers. While technologies like embedded payments can make payments safer and more convenient — and neobanks can offer better value — concerns and misconceptions won’t go away unless they’re tackled head on.

Want more in-depth insights on consumers’ shifting attitudes to payments and how you can meet their expectations in the months and years ahead?

Read the full Lost In Transaction report: Consumer payment trends 2022: Navigating online payments in the age of uncertainty.


How can businesses boost employee experience for finance professionals?




By Martin Schirmer, President, Enterprise Service Management, IFS

Over the course of the last year, The Great Resignation has seriously impacted organisations across the globe. Staff are quitting in huge numbers, leaving companies unprepared and struggling to fulfil their workloads. In fact, mass departures are happening at all levels of the labour market, as employees attempt to adapt to the hybrid working model and growing socio-economic uncertainty.

In light of this, optimising the employee experience (EX) to attract and retain talent has become a top priority for employers. Organisations have come to understand the necessity of taking immediate steps to drive employee engagement and reshape workplace culture.

The financial services (FS) industry is no exception to this trend. From increasing employee burnout to growing career dissatisfaction, the pandemic has exacerbated the need for transformation across finance teams. This is exemplified by recent data from Spendesk, which found that approximately 40% of finance professionals are willing to leave their roles or already have concrete plans to do so.

Organisations looking to get ahead of the competition must put in extra efforts to retain their existing workforce. The fact is that employee expectations and requirements have irreversibly changed, with more workforces becoming increasingly distributed. Today’s hyper-connected workforce values flexibility and simplicity, and it is organisations which offer these experiences that will succeed in the long term.

As part of this process, finance companies must look towards the power of technology to create seamless user experiences across devices. From automating workflows to improving overall efficiencies, Enterprise Service Management (ESM) can help organisations to boost user satisfaction and go that extra mile for their employees.

How poor EXs are driving finance teams to quit

With over 40% of employees spending a significant proportion of their time carrying out mundane, manual tasks, it is not surprising that poor EXs are having a detrimental impact on job satisfaction. Finance teams in particular have been slower to digitise core processes, leading to a heavy reliance on manual tasks. This not only increases the amount of time spent on each task, but also impacts the engagement levels of finance professionals who cannot focus on more strategic aspects of their roles.

As a result of the pandemic, flexibility has also moved to the forefront of finance teams’ desires. Given the fast-paced nature of this industry, the conversation surrounding work-life balance has increased rapidly. Failure to offer flexible working policies, coupled with a lack of technology to facilitate this flexibility, has led to poor EXs across the board.

Most notably, the overarching move to omnichannel, digital-first approaches has dramatically reset both customer and employee needs. Finance is the third-slowest running corporate function behind legal and IT. Operating in a competitive environment, 73% of finance operations are facing pressures to speed up, improve efficiency, and prioritise automation.

Mitigating the problem using technology

ESM, an offshoot of IT Service management (ITSM), is the cornerstone of smart digital transformation for organisations. It can help finance teams to streamline and automate routine processes, such as monitoring the status of service requests, approving expenses, sending invoices, and tracking payments. In turn, this will free up employees’ time, reducing the burden of manual tasks and enabling them to focus on the more strategic tasks.

Another advantage ESM can offer finance teams is the ability to adapt to each department’s minimum requirements for data privacy. Accounting, for example, needs additional layers of compliance built into the system.

ESM can also facilitate cross-departmental collaboration, helping finance professionals to communicate with the wider business and perform tasks more effectively.  Organisations can use ESM to incorporate all internal services into a single platform, offering employees a well-rounded view of the business and promoting a sense of community across all levels of an organisation. This will boost productivity, whilst enhancing visibility and control.

Ultimately, the current job landscape has brought with it a new set of challenges. Organisations in the FS industry looking to navigate the storm and retain top talent must refocus their efforts on bolstering the EX. Embracing a new era of technological innovation that empowers employees and boosts engagement is a critical step in this process.


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The penny has dropped – the finance sector needs Data Governance-as-a-Service




By Michael Queenan, Co-Founder and CEO at Nephos Technologies


In our data-driven world, the amount of data is growing exponentially and it’s predicted that the amount generated each second in the financial industry will grow 700% this year. Leaders of financial services organisations have realised two things since the start of the pandemic – that data on their customers and services is their greatest asset and that they must embrace technology to make intelligent business decisions to grow successfully and outperform competitors.

Since the financial sector holds arguably the most valuable and sensitive information, organisations must do more than just store this data. They need to ensure its security, integrity, and governance so that it’s useful in improving the brand’s customer experience, innovating products and services or predicting future trends to improve risk management.

Yet without a robust data governance model – a strong set of rules and processes for what data means, and how it is categorised, owned, accessed, stored, and used – data is worthless. Only when an effective data governance model has been established, will data meet regulations and be secure. Data leaders must shift gear in their data processes to avoid hefty compliance penalties and unlock potential value from their data assets.


The data governance challenges faced by financial sector organisations

The barriers for achieving ‘good governance’ are many and varied. Ignorance of the benefits of data governance is a major hurdle for developing a governance strategy. Many financial firms have invested – at significant cost – in data governance tools, but struggle to deliver the benefits they are looking for. Many don’t have the right skills and resources to maximise or set the right metrics to measure the business value. Some are compromised by unoptimised gaps in their approach.

With many different elements to master, data governance is complex – from identifying the right tools to managing the challenges presented by encryption, all whilst ensuring that data quality is sustained and data is managed responsibly.  The negative impact of misplaced investment in ineffective data governance strategies can be significant, for the short and long-term.


Why data governance matters

With the acceleration of digital adoption in the financial services industry, it has become crucial to deliver seamless, intelligent customer experiences. Data governance is the key to managing data flow, ensuring compliance, and scaling up. Proof that data governance matters is evident in the Master Data Management Market growth prediction, from $16.7 billion in 2022 to $34.5 billion by 2027.

Data governance is a comprehensive methodology for ensuring the quality and security of the company’s data. The various benefits of an effective data governance strategy include minimised risk, coherent policies, metrics and processes, and better implementation of compliance and enhanced data value. However, for financial services, there are significant advantages as a result of the following:

  • Data governance saves the company money by increasing efficiency. Precious time can be saved by having good quality data and a single source of truth, with less duplication of data, and less time needed to correct data errors.
  • Good data governance gives the business confidence in having accurate and trustworthy data, the holy grail for delivering outperforming customer experiences.
  • A data-driven culture can also be introduced to your business through good data governance. With the ability to gather critical customer and market insights that can guide the direction of your business, data governance allows financial institutions to drive innovation and gain competitive advantage.


Bridging the governance gap with Data Governance-as-a-Service (DGaaS)

Increasingly organisations are turning to the ‘as-a-Service’ model to bridge the gaps in their data governance capabilities, as well as ensure critical alignment between objectives and results. This dedicated approach aims to minimise the risk of investments and delivers the strategy and proven technologies required to ensure data governance success.

DGaaS can be applied across each major component required to deliver good data governance. First, it uses software tools to scan all data within a typically complex financial services data infrastructure in its data discovery and classification phase. Without this detailed insight, organisations can’t always identify their data assets, any data mishandling and the level of risk generated.

The next part of the process is creation and documentation. This means organisations can drive their governance objectives through to execution, while removing the operational and recruitment overheads, which means they can purely focus on value created from data. In doing so, organisations can convert the raw outputs from the toolsets into meaningful business outputs.

With a holistic approach, DGaaS allows financial services organisations to focus on the transformational potential of data while critically staying compliant.


Reaping the benefits

Data is a vital asset to enable financial sector organisations to build the right capabilities to deliver their services and remain competitive. With a robust data governance model, financial firms can assess risk, predict trends, and seize market opportunities based on data-driven insights. Only data-driven processes, built on high quality and effectively governed data, will enable them to build outstanding customer experiences. It’s essential that leaders realise data governance is a fundamental discipline, not a luxury, and establish an effective model to formalise processes and responsibilities before their data lets them down.

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