June 27, 2022
Creating Better User Experiences with Precise Location for Digital Banking
Post Summary – Relevant Facts
- During 2020 more than 70.3 billion real-time digital payment transactions were processed globally, an increase of 41% compared to previous year. This means banks need to create a better digital customer experience.
- Banks have much to gain by creating better experiences that solves real problems. A UK bank that deployed transaction enrichment services by Snowdrop saw a 30% decrease in transaction query calls to customer service.
- There are many benefits that banks can gain from the addition of location-based services such as resolving consumers’ doubts and axieties, providing enriched transactions to consumers and understanding consumer spending habits.
- By using precise location and enriched data, the banks can work toward providing a better user experience by knowing and meeting the customer’s needs in just a few weeks.
Many companies struggle to offer top-notch customer experiences in today’s world. It takes work to entice customers to come back to buy more products and services from them. The retail banking sector is no different: current trends show an increase in digital and contactless payments due in large part to the COVID-19 pandemic and a wider variety of payment alternatives.
During 2020 more than 70.3 billion real-time payment transactions were processed globally, an increase of 41% compared to the previous year. Mobile wallet adoption rose to an all-time high of 46% in 2020, up from 40.6% in 2019. Countries such as Brazil, Mexico and Malaysia, where many people historically relied on cash, are now among the fastest adopters of mobile wallets.
Clearly, consumers today are now used to paying for many of their daily purchases online or via contactless in physical stores. At Snowdrop we see this every month with an increase in the number of recurring online transactions such as a mobile game via one’s iPhone, a software purchase through Google Play or consumer subscription services such as Netflix, Spotify and others at our banking customers.
This means banks, more than ever, need to build a better customer experience = one that facilitates rather than irritates. If not, there is a risk users will find a better, simpler payment mechanism that better suits their needs.
Some banks have taken initial steps. For example, a handful of traditional banks have launched Personal Finance Management (PFM) tools. These new services mostly help to categorize a consumer’s spending habits whilst providing some suggestions and advice.
While a step in the right direction, PFM services still cause confusion for some users and often are not intuitive. For example, showing a consumer that they spend a certain amount on “Gas Stations” when in fact the user purchased groceries on a Sunday drive home.
Why precise location is a must
At Snowdrop we have seen a boost in consumer engagement while costs dramatically decrease when banks solve real problems: simply identifying a transaction and showing the right logo and location clearly resolves a headache for many consumers. For example, at one UK bank, the deployment of enriched transaction services in the bank statement on the mobile phone reduced calls to the bank’s call centre by 30% in just the first few weeks alone.
‘I am extremely impressed. Visa and Snowdrop came together to create a
solution that is easy to implement and helped us deliver cost savings and
empower our members’
Darren Mead
Banking App Product Owner
Clearly, banks have much to gain by creating better experiences that solve real problems. Other studies also confirm this: a 2021 Digital Banking Report from Mobiquity conducted with 2,500 banking customers showed that 46 percent of people below 55 years of age indicated they would switch banks to get better digital features. The younger demographic is most likely to consider switching banks if their needs are not met. This means that in growing regions like Southeast Asia many young, digital savvy users will be much more open to digital banking and less beholden to existing traditional banks.
Banks will benefit by adding location-based services such as:
- Resolving consumers’ doubts and anxieties about unclear transactions. Instead, it is better to turn confusion into clarity by showing intuitively exactly where consumers spend their money. A clear merchant name with a logo on a map is often the simplest way to do this.
- Providing enriched transactions to consumers. Banks are integrating new functionalities into their services, and location enrichment is one of them, like the Snowdrop Merchant Reconciliation System™. Built as an API, MRS works every time a consumer makes a purchase: it provides the merchant’s name, logo, website, address, contact details and relevant information. Transaction Data Enrichment is important to instill trust in the consumer.
- Understanding consumer spending habits. Digital and traditional banks are continuously working to provide today’s bank consumers with the most personalized experience possible. Because sensitive user data is involved, consumers expect a secure and truthful experience. Integrating location-based enriched services will help the banks understand consumer spending habits and find ways to improve the user experience. With the increase in online transactions, banks are also able to create a more comprehensive view of consumer behavior and in return better tailor specific products and services.
For example, if a consumer makes purchases abroad, the transactions will be displayed with all the enriched information of the place of purchase. Moreover, the bank can also assist the user with information on exchange rates, travel insurance, ATMs nearby, recommendations, etc. This avoids, as mentioned above, the user’s confusion due to a lack of understanding of their transactions.
In short, by using precise location and enriched data, banks can work towards providing a better user experience by knowing and meeting the customer’s needs in just a few weeks.
Want to know more?
Snowdrop Solutions currently works with leading digital and traditional banks in Europe, the UK and Asia Pacific. Snowdrop is a location and data intelligence company that has been a Google Trusted Partner since 2013 and Visa Europe since 2020. MRS brings together our deep understanding of the Google Maps APIs, a proprietary database and a second to none matching algorithm. We offer superior match rates and accuracy to any of our competitors and a unique customer centric approach that, other than transaction enrichment, provides cost savings and churn reduction to our clients, over and over.
If you want to know more about our product, you can access more information on our dedicated MRS page or by contacting us. A member of the team will respond to your request promptly.