How can Digital First banking benefit financial institutions?

[ This article was originally published here ]

The benefits of Digital First banking for the consumer are clear. Whether it’s both physical and digital card issuance, real-time card management or secure, hassle-free online payments, the services on offer to consumers when it comes to Digital First banking are almost endless. With these digital features comes increased convenience and instantaneity, the core principles of modern banking.

But what is the benefit of Digital First for banks? While better serving the consumer is always the core goal for financial institutions, Digital First can also enhance the services that banks offer in a variety of key areas. So, before investing in a best-in-class digital banking infrastructure, it is important to know how digital first can benefit your bank as well as your consumers.

Empowering EMV as the premier online payment method

While the use of EMV bank cards is a staple when it comes to physical, in-person purchases, their use for buying goods and services online is less consistent. The meteoric rise of online shopping has seen the payment market diversify, with more consumers paying for goods and services with digital wallets and person-to-person (P2P) payments, displacing EMV bank cards as the primary option when shopping online.

What’s more, the use of EMV cards online can come with its own problems. Research has found that as many as 27% of shoppers abandon their online shopping carts due to complicated checkout processes. While seemingly easy, the constant process of entering in card details has proven to be a sticking point for consumers.

With this in mind, how can banks make EMV cards more accessible than other payment methods?

With a Digital First approach, banks can cut out the hassle of entering card details by offering consumers instant digital card payment through their mobile apps. With services such as virtual card display, consumers can seamlessly pay for their products without having to spend time repetitively punching in their card details.

Why does this benefit banks? With a more convenient transaction process, consumers will be incentivized to use their EMV cards from their mobile. As a result, the increased convenience of the virtual card leads to more consumers using their bank issued EMV card for online transactions.

The battle for online purchases is far from over, and with the help of Digital First banking, banks can strengthen the online position of their EMV cards against competing methods.

Enhanced Security for the issuer and consumer

We can all agree that when it comes to payments, security will remain a top priority across the board, both for banks and consumers. As of last year, global payment fraud has been predicted to increase to as much as $40.62 billion in 2027 (25% higher than 2020), What’s more, CNP (card not present) fraud accounted for 76% of fraud losses in Europe in 2020. With these numbers in mind, it is critical that banks equip themselves and their consumers with the tools needed to prevent illegal activities from occurring.

With Digital First banking being anchored around the mobile banking app, banks can use measures such as biometric authentication or digital signatures to ensure that only the certified user of the app can access the mobile banking suite.

And, in the unfortunate case of a physical card being stolen, consumers can be alerted of unwanted transactions through real-time transaction display in the form of notifications on their smartphone. Upon being alerted, consumers can simply cancel or freeze their card in real time through the mobile app, to prevent any further unwanted transactions.

By empowering consumers with the tools to protect their payment information, banks can in turn provide further protection to themselves through Digital First.

Increased competitiveness (through a wide, adaptable range of services)

Today, banks are well aware of what the consumer wants when it comes to banking: simplicity and instantaneity. As such, banks across the financial services landscape, including online-based ‘neobanks’, have expanded their offering to cater to these evolving consumer expectations. So, as each bank broadens the spectrum of services they offer, maintaining a competitive advantage in a fierce market is crucial.

With a Digital First methodology, banks can become more competitive by giving consumers the keys to their own banking experience, offering an adaptable service that can fit the needs of any consumer, all the while maintaining the core tenets of convenience and instantaneity.

Whether it is an online shopper who wants to use specific cards or particular eCommerce sites, or a traditional bank customer who prefers to collect their new cards in store, Digital First enables banks to shapeshift to fit the needs of any customer, regardless of their personal of preferences.

While better serving consumers will always remain a priority for any bank, it’s important that the solutions they implement offer additional benefits that help take their range of services to the next level. With Digital First, the promotion of customer experience can simultaneously improve a bank and their services.

Looking to find out more about Digital First? Learn more at our dedicated webpage. If you have any questions, let us know in the comments or tweet us @ThalesDigiSec, and we’ll get back to you with an answer!