What comes after cashless? – FinTech Futures

When was the last time you went into a store and paid with cash?

Data is at the heart of the financial sector’s digital transformation

More and more of us are throwing away our wallets, and with them the use of physical cards and pin numbers.

The pandemic accelerated the transition to a cashless society globally, but we have been heading in that direction for quite some time. So much so that in 2020 the number of people in the UK who say they rarely use cash grew to 13.7 million, almost double the 7.4 million in 2019.

The explosion of data, and what to do with it

For businesses, an important benefit of an increasingly cashless society is the explosion of data it provides, but the real benefit lies in what you do with the data you collect.

This is how you truly understand your customers. Cashless customers have created rapidly changing consumer needs. They demand more personalization and at the same time expect the products to deliver on simplicity and ease of use.

The explosion of online banking apps and contactless payments not only meet these expectations, but are also more efficient payment models. Looking ahead, financial services leaders must draw on key insights to deliver outstanding customer experiences that not only meet today’s needs, but offer incentives for the future.

Protection of data in a cashless society

As we move closer and closer to a digitally driven, cashless society, how will fintech leverage and protect customer data?

While digital payments create the opportunity for financial institutions to better understand their customers, the risk of customer data being exploited by fraudsters is becoming a major concern.

And it’s easy to see how these concerns arise, especially for those accustomed to cash payments that leave no digital footprint. With the democratization of data, consumers are much more aware of their digital footprints and are often confused when making a purchase: who is using my data and what are they using it for? Not to mention the increase in data breaches and cybercrime during the pandemic.

But the good news is that in addition to complying with local data protection laws, financial institutions can use data and analytics to identify emerging threats and provide insights to predict and alert on potential fraud. Harnessing the power of data in this evolving environment will help financial institutions predict consumer behavior and be aware of potential risks.

How do financial institutions embrace change?

To embrace this digital reality, traditional financial institutions are rethinking their existing technical setup and investing in modern data and analytics tools to help understand customer needs and accelerate digital transformation.

Data is at the heart of the financial sector’s digital transformation. It has huge potential for the sector and companies are trying to reshape their business models to take full advantage of this potential.

Garanti BBVA, for example, recently implemented an ambitious project to transform its 900 traditional branches into digitally focused service centers and has successfully transformed its employees into self-service analytics users.

But old systems and a lack of relevant skills can create major obstacles, with 44% of financial companies having problems integrating new technology with older systems.

The good news is that there are many tools to help businesses make this transition, and to prepare for a cashless society today and tomorrow.