By Simon Quinton, Senior AVP and UKI Country Manager at Tableau, the analytics platform for Salesforce
Last year, approximately 23 million people in the UK used virtually no cash at all, and notes and coins are expected to account for just 6% of payments within the next 10 years (UK Finance).
These latest findings from UK Finance should come as no surprise, as more and more of us ditch cash altogether – instead relying on debit and credit cards to make payments, while also switching to digital services for our banking needs.
But what does this mean for business?
First of all, the shift towards a cashless society comes with an immense amount of consumer data. But how can businesses make the most of this valuable resource, which if utilised can help businesses understand their customers and their changing needs?
Afterall, we know that cashless customers come with a completely new set of expectations. This includes demands for more personalisation and for products which are easy to use, a seamless user experience.
UK-based retailer, Ocado, is just one example of how businesses can leverage their own data sets to meet changing customer expectations. The online supermarket connected supplier data to product performance and customer shopping behaviour to boost sales and to provide a more personalised shopping experience that’s in-line with customer needs and expectations.
This flexibility and agility apply to fintech’s too. The rising number of online banking apps and options for contactless payments not only deliver on these customer expectations, but they are also more efficient models of payment. Financial Services leaders must draw on key insights like this to deliver outstanding customer experiences that meet current needs and anticipate the future needs of their customers too.
The implications for data
A cashless society has an important impact on customer data too – as cashless becomes the norm, how can fintechs and financial institutions help protect customer data?
As cashless payments leave a trail of data, the risk of this data being exploited is real, and some customers can be left wondering how this data is being used, and what happens if there is a breach of data or fraudulent activity?
However, financial institutions can also use data and analytics to identify emerging threats, and provide insights to predict and alert customers to issues like fraud in a way which would have been impossible in a cash driven society. Leveraging the power of data in this evolving environment will help institutions predict consumer behaviour and be alert to potential risks like fraud.
How financial institutions can transition to a cashless society
Financial institutions are rethinking their technical setup and investing in the latest analytics and data tools to thrive in a cashless world – helping them to understand their customer needs and accelerate their digital transformation. Data lies at the heart of this digital transformation, and it holds immense potential for the sector and companies working to reshape their business models.
Old, legacy, systems and a lack of relevant skills can create real obstacles for digital transformation. Some 44% of financial services companies have difficulty integrating new technology with legacy systems.
But the good news is that there are plenty of tools to help financial institutions make this transition to digital, and to prepare for a cashless society. There are also plenty of examples of financial institutions who have already made this change and who are reaping the benefits.
One of those examples is Charles Schwab – one of the largest publicly traded FS companies in the US, with 345 retail branches. However, their customer experience was highly varied from branch to branch. With increased competition, the need for a more tailored customer experience was becoming a priority. Schwab aligned its branches and centres, monitoring both client activity and satisfaction to deliver client insights that allowed them to understand the customer’s needs. Bringing their data together with Tableau allowed leadership to get a better picture, not just by region but by customer. This enabled every retail branch to engage more fully with customers and respond to their needs.
Charles Schwab and Ocado Retail are just two examples of businesses driving digital transformation to flourish in a cashless society. By leaning into their data and analytics they’ve unlocked their own data – not just about customer activity but about the satisfaction they felt with the service provided. Ultimately these changes help to future proof businesses – and place the customer right at the heart of meaningful transformation.