As financial activity continues to take place virtually far more often than in person, the payments landscape has undergone significant change. A recent Accenture report predicted that North American banks will lose up to 15% of payments revenue—or $88 billion—over the next three years due to the rise in big tech and fintech companies.
This means to remain competitive, banks will need to re-evaluate the way they handle their payments business line—starting in 2020. Consider the following tips as you explore a strategy for increasing payments revenue over the next year.
1. Revamp Your Payments Products
With the daunting payments revenue forecast, you essentially have no choice but to adapt your payments products to the new landscape. Your payments business line cannot look like it always has.
A couple areas to examine are data and security. According to the 2019 Accenture Global Payments Pulse Survey, 69% of executives aspire to sell raw data within the next three years, and 18% say building security into retail payment transactions will be a main priority as a way to adapt to an “instant, invisible, free” (IIF) payments world.
Rather than leaving data untouched, you may have an opportunity to create new products from transaction information, such as fraud detection or data-based decision scoring. And, adding stronger security measures to your existing payments structure will be critical for retaining customers, as the threat of data breaches continues to impact every industry on a large scale, including financial services.
2. Consider FinTech Partners
The Accenture report identified payments as North America’s largest fintech segment, attracting $10.6 billion across more than 800 deals between 2016 and 2018. And, 32% of retail bank executives view fintech as their biggest competitors in terms of revenue migration.
However, your bank’s relationship with fintech doesn’t have to be entirely competitive. Instead, you may want to consider if partnering with these companies would benefit your business rather than spinning your wheels trying to keep up with them. Part of your 2020 strategy should include evaluating which fintech firms align with your sales, marketing, and technology goals, and pursuing relationships that support easy integration. This will allow you to strengthen your payments business line, rather than phase it out.
3. Step Up Your Digital Experiences
Fintech and big tech companies have made serious headway in the payments space because they offer customers the kind of service they’ve come to expect in all areas of life: seamless, instant, and personalized. You must build your payments business around digital customer experiences in order to deliver a solution that meets your market’s expectations for efficient banking.
In The Payments Ecosystem research report, Business Insider Intelligence found that the digitization of payments encompasses more than just retail, with mobile P2P payments, digital remittances, and digital business payments on the rise. These offerings all focus on removing friction from the payment process and facilitating convenient transactions. These two objectives should be factored into the design of all your financial services, including payment solutions for retail and commercial customers.
Prepare for Growth with 360 View
360 View is here to support your payments revenue goals for 2020by helping you create customer experiences that drive loyalty. Our growth platform includes a CRM, marketing automation, analytics, and more to help you deliver targeted messages and create personalized experiences for your payments customers and prospects. And, our team will work alongside you to set up the tools you need for this business line growth. Request a demo today to learn more, or download our recent webinar: “A Practical Guide to Data Analytics.”