The Future of Mobile Banking Hinges on New, ‘Ambient’ Technologies

Some day, thanks to digital assistants, smart watches, voice-enabled devices and other technologies, banking tasks will become invisible.

As technologies like blockchain, AI and the Internet of Things continues to mature, banks and credit unions will have to prioritize an omnichannel delivery strategy that creates a truly responsive customer experience — something you could call “ambient computing” — if they hope to keep pace with an increasingly mobile population and align with digital natives.

Ambient computing, simply explained, is about embedding technology seamlessly into our day-to-day lives and responds to our needs, desires, and habits. When Amazon Alexa reminds you to take an umbrella because the forecast predicts rain later that day, or when Google Maps auto-routes you to the office when you leave your apartment at 8 am on a Wednesday, ambient computing is at work.

By leveraging emerging technologies like smart watches and voice-enabled devices, ambient computing is poised to revolutionize consumer behavior. Banks and credit unions that want to maintain a competitive edge in an increasingly tech-centric world need to incorporate this reality into their long-term strategy.

U.S. Bank, already ahead of the curve, became the first bank to implement voice-powered services on Alexa, Google Home, and Siri in June 2018. Ambient accounts, based on the concept of banking where you spend, are also on the rise. (Think of it as similar to a one-click Google or Facebook login, eliminating the hassle of having to create an account for every new website you visit.)

Ambient computing will ultimately lead to a banking experience fully integrated into how customers conduct their lives — “banking in the background.”

For Digital Natives, It’s Going to Be All About Ambient Banking

“Ambient computing will ultimately lead to a banking experience fully integrated into how consumers conduct their lives — banking in the background.”

Millennial and Gen Z consumers are increasingly turning towards big tech and fintech providers for financial services. The Millennial Disruption Index found that 73% of Millennials would be more excited about new offerings from Google, Amazon, Apple, Paypal, or Square than from their own bank or credit union. Nearly half expect the tech sector to drive innovation in banking.

After all, once you’re used to used to hailing a ride with one tap on your device, an errand like “stopping by the bank branch” feels like a massive inconvenience. Paying bills from your smartwatch, on the other hand, is completely natural and intuitive. For these and future generations, financial management and technology will be inextricably intertwined.

The ease of switching institutions, many alternatives, and the inevitable transformation of our relationship with technology means financial institutions must prioritize appeal and usability for Millennials and Gen Zs. Recognize that they are early adopters — and meet these consumers where they already are: on tech.

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Ambient Banking Can Propel Digital Transformation

When it comes to digital, many institutions have primarily focused on putting brick-and-mortar functionality into online and mobile molds. Less work has been done on innovating the user experience or creating new products. This gap partially accounts for the rapid growth of fintech and for big tech’s encroachment into finance, especially in payments and the relatively young area of peer-to-peer services.

Even though ambient banking mediates user interaction through technology, it provides one key piece for moving from pure transaction to a truly human-centered, responsive experience: context.

The ability to plug into a consumer’s day through ambient intelligence will yield meaningful data. Having that data will enable the redesign of their journey from top to bottom. This goes beyond shallow attempts to “go digital.” Instead, the focus will be on deeply understanding a consumer’s daily rhythms, pain points, and needs. This can help create a completely personalized, invisible experience.

Reducing the sticky points involved in everyday banking will also give people time to evolve their personal finances to the next level — offering customized products and services.

Ambient Banking’s Evolving Role

Technology has made the world smaller, and people are taking advantage of this by living more flexible, global lifestyles. Ambient technology has the most potential to serve the needs of an increasingly interconnected economy.

For example, the notion of work is evolving away from the traditional 9-to-5. Freelancing, remote work, the gig economy, and entrepreneurship are on the rise, and for a mobile, borderless workforce, a smartphone app is the bare minimum requirement when it comes to digital banking. Banking players that incorporate ambient have the ability to create a more functional, intuitive “on-the-go” experience, significantly differentiating themselves from institutions still stuck on centralized legacy infrastructure.

Right now, technology is highly input-driven, but evolution towards the ambient paradigm will provide incredible insights into a consumer’s behavioral and psychological habits. Though still in its beginning stages, ambient tech will allow financial institutions to anticipate and fulfill their customer’s needs — in some cases before the consumer even knows they have them.

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