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OVER TWO-THIRDS OF CONSUMERS DO NOT UNDERSTAND HOW THEIR DATA IS USED

  • Over half (58%) of consumers want long term relationships with brands, but there might be a personalisation pitfall

 

  • One in three (33%) consumers saw irrelevant retail offers as the biggest marketing mistakes

 

As consumers become more aware of their data, its value and how it is used has become a key concern. The latest APEX report from international payments solutions company, Valitor, reveals the key marketing challenges brands will face in using customer data to build relationships. With more than half of consumers (58%) indicating they want to build long-term relationships with brands, brands have so far been failing to deliver the personalisation customers expect. In fact, the report found that a third of consumers view irrelevant retail offers as the biggest marketing mistake made by brands, and almost half (48%) think when it comes to relationship ‘building’, all they see after-sale are spam emails.

 

Personalisation across the board does not meet expectations. Over two-thirds of consumers (68%) do not know how their data is being used by brands. This knowledge gap, combined with the implementation of GDPR and the ongoing discussions of data being used in political discussions, has spiked consumer interest in data use and privacy. However, while interest has increased, the actual use of data by brands is creating uncertainty, confusion and setting unachievable expectations about the sort of interactions customers should expect.

 

“The latest APEX report reveals that consumers want a long term relationship with brands, which is clearly an opportunity that needs to be pursued. To succeed in establishing relationships, brands need to show customers that by having their data, they are able to create the long term value they crave. Currently, though many consumers feel brands’ efforts are missing the mark, which is risking weakening customer retention” said Halldór Lúðvígsson, Managing Director, Omni-channel solutions at Valitor.

 

Embracing data and privacy

The good news for brands, however, is that consumers are still happy to provide them with personal data, as long as it is used in the right way. In fact, 75% of consumers are comfortable with the concept of a brand holding personal information in order to improve the services and relationship. Consumers also revealed that they are most willing to share email addresses (42%), followed by clothing size (29%). But in order to keep consumers happy, brands need to ensure that they use this data wisely if they are to encourage the sharing of more types of information.

 

The impact on the customer relationship

The outdated practice of getting data and then taking a “spray and pray approach” has clearly had negative effects on consumers. For example, over a third (34%) of consumers say that they have been made to feel like a brand no longer wants to impress them once they have parted with their money. Another third (33%) aren’t convinced brands still care about them after the sale is done. While a quarter (25%) highlight the fact that occasional offers are not the same as a proper customer service relationship.

 

Lúðvígsson explains, “In a world where people are increasingly sceptical about sharing data, brands must look to be open and transparent about why they want it, how they keep it safe and why it is good for the consumer. Then they need to put these words into actions and give their customers an actual personalised experience. A one size fits all approach, simply doesn’t work. The dangers of this are quite clear with recent research highlighting that a bad experience will see 47% of customers not shop at a store again.

 

“For brands to succeed they need to embrace data and privacy, redefine the data journey and ensure there is a full relationship cycle. Get this right and the pitfalls of privacy and personalisation can be avoided.”

 

“In such challenging times for brands, bad customer experiences often lead to losing customers. Gartner has predicted that by 2020, poor customer experiences will destroy 30% of digital business projects. Our own research highlights that bad experiences will not only destroy business projects but increase the likelihood of customer churn and negative word-of-mouth by up to 10 times. Now, more than ever, this is very bad news for any brand. Managers need to take a long and hard look at how they are treating customers during their entire journey and rapidly turn these bad feelings around. Failure to do so could be catastrophic,” states Prof. Dr. Phil Klaus, Professor of Customer Experience Strategy and Management at the International University of Monaco.

 

More key stats from the report:

  • The 18-35 age group is far more confident in their understanding of how brands use their data (18-25 were 40%; 26-35 were 43%) compared to the 66+ age group (19%).
  •  44% of consumers take notice of marketing communications from a brand:
    • 56% take notice of emails
    • 46% notice free samples/trials
  • 52% of 18-25 years – the highest proportion of all age groups (and the emerging customer base for many brands) – are receptive to messaging from brands.
  • The oldest consumers, 56-65 and 66+ are the least likely to pay attention to brand marketing.

 

To learn more about personalisation and privacy, you can download the full report here

 

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ERSTE BANK HUNGARY IMPROVES AND SECURES THE REMOTE BANKING EXPERIENCE WITH ONESPAN MOBILE SECURITY

ONESPAN

Leading Hungarian bank deploys OneSpan’s Mobile Security Suite to one million customers to make mobile banking convenient while fighting fraud and meeting PSD2 requirements

 

OneSpan™ (NASDAQ: OSPN), the global leader in securing remote banking transactions, today announced that Erste Bank Hungary, a subsidiary of Erste Group Bank AG, one of the leading banks in Central and Eastern Europe, has integrated OneSpan’s Mobile Security Suite into its banking app MobilBank. Erste Bank Hungary selected Mobile Security Suite to enable and protect online and mobile transactions and to comply with PSD2 requirements for authentication and dynamic linking.

The European Payment Council has stated that social engineering attacks continue to increase and remain instrumental in fraud schemes, often in combination with malware.[1] Erste Bank Hungary chose to implement OneSpan’s Mobile Security Suite to protect against potential social engineering and malware attacks directed at its customers. OneSpan’s technology enables banks to integrate application shielding, biometric authentication and transaction signing.

Erste Bank Hungary added Mobile Security Suite’s Cronto visual transaction signing to replace the bank’s SMS authentication with push authentication for login and transaction signing. This new process improves security and eliminates significant costs related to SMS delivery. OneSpan’s Cronto technology also helps fight social engineering attacks like phishing, while enhancing the customer experience by  enabling transaction signing using a color QR code.

“OneSpan’s proven technology will help us maintain our leading position in the market without compromising on security or the customer experience,” said Erste Bank Head of Digital Services, Akos Andras Molnar. “As part of this roll-out, our customers can also make online purchases using push notification with any retailer connecting to Erste Bank via the 3-D Secure protocol.”

“Criminal hackers continue to target banking customers as social engineering remains a preferred technique,” said OneSpan CEO, Scott Clements. “In their search for security solutions, banks need to consider cost, convenience and regulatory compliance. OneSpan’s technologies address these concerns so that banks can focus on providing a secure and convenient customer experience.”

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HOW WILL LENDERS TREAT THE FINANCIAL SYMPTOMS OF COVID19?

FINANCIAL

COULD the coronavirus pandemic spark a financial crisis similar to that which was seen in 2008? Tim Kirby, Group Commercial Director of the global fintech Monevo, a personal lending marketplace and platform, discusses how Covid-19 could play out for lenders.

The 2008 financial crisis, explains Kirby, was about credit over-exposure. While strains are apparent in the money markets today, it is not 2008, when risky mortgage investments in the US banking sector and into the UK caused everything to collapse.

Kirby said: “The financial crash was self-inflicted for many reasons, including poor income verification, poor credit quality assessment and poor employment verification (self-certification). It was asset-backed predominantly as it was led by sub-prime mortgage lending.

“My thoughts are that once the virus is contained, the economy will most likely turn back on within a few months, however recovery to current levels will be somewhat longer.”

Kirby predicts that it is very possible this downturn will be shorter than the 2008 financial crisis based on a number of factors.

He said: “The financial crash was either at a house purchase level or encouraging debt consolidation through re-mortgaging that placed unsecured debt into secured debt over a longer term. The consumer then ramped up unsecured debt again with the same poor assessment applied and eventually ran out of headroom.

“This was propped up by the capital markets and warehouse funding lines being supported through securitisation models that rated the loans held in the bonds as AAA.”

Kirby adds that the coronavirus outbreak is more micro and consumer-led than the recession was.

“There is still a great deal of uncertainty, but consumers are certainly going to experience affordability difficulties in the short-term, perhaps three to six months,” Kirby explains. “Lenders are already tightening their criteria and that could lead to more tactical initiatives being introduced.”

Kirby points to the potential introduction of black-listing certain occupation types most affected, and reducing opening balances to applicants that they are most prepared to lend to.

He said: “At Monevo, we have been speaking to lenders who are predicting a 50% slow down, with some pausing to assess short-term strategies, as clearly there are aspects of credit / risk scorecards that aren’t working at the moment.”

Kirby also adds that access to capital markets will be a challenge in the short term: “Lenders who don’t lend off balance sheet may become constrained and you would have to question the Peer-to-Peer lender impact as the returns and appetite of investors could be under threat.”

“Additionally, those lenders nervous about funding certain cohorts of consumers, now have those very same consumers currently in their loan books.

“So, for lenders, focussing on forbearance and other support activity to protect these consumers in the short term of 3-6 months, will be a priority.

Kirby takes the view that it is important lenders relieve some repayment pressure from consumers in the short term, so they can rehabilitate when the new normal arrives.

“Lender feedback in the last week is that they haven’t seen a massive increase in defaults, it’s very early days though. Anecdotal feedback from lenders that are strong and well-funded is that they expect strong growth when the market returns, and that those who are optimised and agile will see an upswing.

“What I am hearing, is that consumers will remedially seek liquidity through debt, as the world normalises to address the short-term pain being experienced at present.”

Kirby adds that lenders who look at credit risk closely when the upturn comes in three to six months could see dramatic growth, albeit from a reduced base.

He added: “From Monevo’s perspective, day trading is difficult to predict and lenders are re-assessing short-term strategies.  We are using the time at present to apply additional focus on our internal tech pipeline in driving the product development roadmap forward to continue to deliver great solutions for our partners.

“We want to ensure when normality returns and the upswing in both demand and supply inevitably happens, that we are supporting our origination partners and the lenders on our panel as effectively as possible.”

 

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