Banking innovation and the customer

Banking is not a world often associated with innovation.  If anything, banking customers have previously sought out stable and conservative banks – the ones that you can trust with your money.  Furthermore, few question their banking loyalties, happily sticking with their long-trusted bank, regardless of offers and products elsewhere.

Account switching is more prominent amongst businesses than consumers but even then, banks benefit from a high level of indifference from their customer base when it comes to moving banks.

A combination of the financial crisis and technological advances has changed this. The growth in innovative financial tools has also increased competition, with the emergence of new players looking to capitalise on business and consumer appetite for improved banking products.  But what are these tools, and how are they impacting different types of customers?

Mobile banking is comparatively new, but is already regarded by many, especially the new generation of consumers and businesses, as an essential tool.  It is not, therefore, too difficult to imagine that customers could switch banking provider in order to gain access to more user-friendly online or mobile banking solutions.

Contactless payment capability (NFC) has been long-talked about, in terms of the convenience it will provide to customers and businesses, but few banks have really put themselves out there to promote such a service on a large scale implementation. 

For small businesses and the self-employed, mobile payments offer the opportunity to improve their business models; take the example of taxi drivers who can take payments via a touch pad in the back of their cabs, or plumbers who can ask customers for an immediate mobile payment, rather than send an invoice or receive a cheque.

Innovation for consumers is often the focus but small businesses can also reap the rewards of technological breakthroughs. E-invoicing, the ability to check and pay invoices online, generates both cost and time savings, improved accuracy and cash flow improvements for businesses.  Ultimately, e-invoicing offerings could be a key deciding factor for businesses when choosing a bank, for example.

It is clear that the times are changing, with a wide range of products and financial services to satisfy tech-hungry customers. It is great to see banks and financial institutions providing innovative solutions for small businesses. Everyone has a right to choose the financial services most appropriate to their needs – are banks finally realising that the customer is king?