We go in search of the holy grail of customer needs and consider what this means for the businesses that serve them.
What do customers want? What do they really, really want?
Well, they’re unlikely to say “Open Banking” or “strong customer authentication”. Forget industry jargon, which doesn’t get to the heart of customer needs.
Forget solutionizing, too. Crypto? Wearables? Digital wallets? Customers don’t want to buy a product. They want a problem solved.
So, what exactly is the problem?
We look at what today’s customers need and expect from banks and retailers, and how this has changed over the last decade. Plus, what the future holds for those looking to satisfy and exceed customer expectations – and how to deliver on it.
Are you solving a real problem that customers have?
Most customers don’t want to pay. They want to buy, send funds to loved ones overseas or settle up with suppliers. Payment is integral to almost every financial transaction, without being the purpose of the transaction.
For something that’s not the purpose, it’s certainly a problem. There’s a mismatch between the cost, speed and service elements of international payments. This creates a gap between what customers expect and what they’re currently experiencing.
The root cause is complexity. Payments can be physical or virtual, analogue or digital, traditional or modern — and sometimes both at the same time.
Various transfer pathways, currency pairings and intermediaries only add to the complications. Often this results in increased cost, reduced speed and a lack of transparency.
Everything is hard before it’s easy
Cross-border payments can be expensive. €15-20 in fees per transaction is not unheard of. When fees are not always consistent or known up-front, it means nasty fee surprises for customers, and hampers the product proposition and expansion prospects for providers.
Cross-border payments can be slow. Two-to-five days to send funds overseas is common for some payment pathways. Customers don’t understand why international bank transfers take so much longer than domestic ones. And providers are frustrated because faster money could mean more customers, better loyalty and growth.
Cross-border payments can be a ‘black box’. Which banks are involved? Which systems do they use? Where is the payment now? It’s not always clear, which translates into unexpected delays, exceptions and failed payments.
The direction of travel
Customer experience is critical, as evidence from the world of e-commerce shows. 70% of online shoppers don’t complete their purchases due to checkouts being too complicated or long. And in an age when social media and online reviews can amplify negative word of mouth, a poor net promoter score can damage revenues.
86% of people refuse to patronize businesses with negative online reviews. This is concerning as the cost of acquiring new customers can be between 5 to 25 times more than retaining existing ones.
With better access to information and the ability to share their dissatisfaction, customers have become less forgiving. Their expectations have risen further and faster than some businesses can accommodate. And with competitors often only a mouse click away, the outlook for the future is clear.
When moving money internationally often costs too much, takes too long and has too many unknowns, it leads to abandonment, customer disgruntlement and, ultimately, a decline in revenue.
What will fix the problem?
Over the last ten years, we’ve become more digital, more mobile and more connected. Customers expect the same of their money.
Customers want the service to function as needed to solve their problem. It’s got to work consistently and reliably, so availability and uptime are key.
As payments never sleep, real-time execution and settlement 24x7x365 in countries with instant payment infrastructure, and near-instant elsewhere, are a must.
Customers want Goldilocks security that strikes the right balance between too many and too few checks. UX is key and shouldn’t create more work for anyone than necessary.
Everyone likes things that are the least hassle. Re-identifying themselves or re-entering the same details each time is just inconvenient, especially for regular customers. Pre-populated fields, one-click checkouts and other time-savers are the way forward.
Customers want to be in control. They want to know where the payment is on its journey, the reasons it may be stuck, and how to move it on. They also want information to anticipate potential problems, track and plan.
How to find the right payment partners
Solving for customer needs may be easy to say, yet very hard to operationalize in the real world. It’s all about delivery. Can you make good on your promises? Can customers place trust and reliance in your ability to execute time after time?
Unless you plan to build or buy your own payments platform, you’ll have to work with the right payment partners. This is not just a technology or access play. Many companies have access to the same type of technology and to local banking infrastructure. Rather, it’s about people, connections and going the extra mile.