COVID-19 and lockdowns drastically changed consumer behavior and catapulted mobile and digital payments to the purchasing forefront, with interesting ripple effects.
While consumer sentiment and behavior are starting to show signs of optimism in the wake of the pandemic, there’s no denying that this year has introduced challenges that demand credit card providers adapt. In an effort to reduce points of contact and avoid crowds, many consumers tried new shopping behaviors that dealt blows to loyalty and drove a flight to digital that’s likely to persist.
Over the last few months, we’ve been helping card providers pivot their businesses in the right direction, and three trends seem to come up over and over. To be clear, we’re not saying these are industry-wide trends—not yet at least. But if you’re a card issuer and these things aren’t already on your radar, we’re suggesting they probably should be.
Millennials represent $200 billion in spending power in the U.S. but are less likely than older generations to have a credit card. After all, they’re the generation that came of age during the 2008 recession and the rise in crippling student debt. How has the pandemic impacted their already complicated relationship with debt? They, along with others, have taken to financing their large financial purchases digitally.
To help lenders adapt, we’ve started working with our clients to embed lending into their existing products. With a well-designed app, lenders of any type can enable customers to apply for a loan or credit, get approved, and receive a virtual card for payment—all while they shop. Apps like these also establish an ongoing relationship— with built-in warranty, service, and rewards features—that can help restore trust and loyalty.
As unemployment and shutdowns strained consumer budgets, customer loyalty was put to the test. But through creative use of fintech apps, we enabled card providers to scale their rewards programs to businesses of any size, giving their networks and merchants a much needed boost.
With consumers doing their best to support their local economy during the pandemic, reward options that cater to small and medium businesses are more likely to draw customers in and increase loyalty. But it all comes down to execution: with fewer consumers shopping in-store, adoption depends on digital campaigns that encourage usage. Done right, card providers can support shopping local while strengthening the relationships that will carry them into the new normal ahead.
As a result of the pandemic, contactless payment usage is on the rise. In particular, the U.S. may finally be catching up to other parts of the world where contactless is ubiquitous. As consumers leverage this new payment behavior, chances are that contactless is here to stay.
Many of our clients are taking things a step further by leveraging contactless payments to enhance the end-to-end customer journey. Customers can now enjoy in-store engagement, rewards offers, and product-service pairing in real time as part of one frictionless experience.
Despite loyalty struggles and the scramble to go digital, there are promising signs ahead. As discretionary spending increases in countries where COVID-19 is under control, it’s likely that consumers will choose to spend more on fewer experiences that are close to home. For financial service providers looking for a window into buying and borrowing in the new normal, digital solutions for lending, rewards, and payments are at the forefront of the journey ahead.
Sandeep: Tell me a bit about the early part of your career.
Tom: I spent a decade helping to build start-ups focused on application and database software. This was where I learned how to sell and do business development. I was fortunate to be part of one company going public and another being sold to IBM.
Sandeep: What is something you learned during this time that helped you with consulting?
Tom: I began to appreciate how different customers achieved varying levels of success with the same foundational technology. This made me understand just how critical getting your team and process right can be.
Sandeep: This is something I only came to appreciate years into consulting, especially after the sale of my first consultancy to Capital One.I saw teams in different parts of the company trying to solve challenges like real-time messaging. Same corporate culture, same technology, same internal support mechanisms. Night and day outcomes.
Tom: We saw a lot of the same thing after selling our practice to EMC (sold to Dell in 2015). This is probably the thing I'm most proud of when it comes to the teams I've helped to build: the ability to perform well in a variety of contexts, sometimes in ways that inspires the client team to up their game as well.
Sandeep: Yes. It's particularly cool to see your team succeed in individual ways after an acquisition...consulting skills definitely translate into the corporate environment.
Tom: Totally. We have people who've stayed on at Dell and risen up the ranks, while others took the opportunity to become successful executives at other Fortune 100 companies....or to start their own agencies and startups.
Sandeep: We've both been around a while. My first consulting project was a Y2K thing for Cisco back in 1998. You've been around a little longer than that :). How do you think consulting has changed most during the past five years?
Tom: I think because there is so much infrastructure available now, consulting has become more delivery and outcome-oriented. A better blend of strategic and tactical. Public Cloud has also enabled velocity to increase at a pace unfathomable 5 years ago.
Sandeep: What has stayed the same?
Tom: It's still mostly about people. People who thrive on change and are focused on their personal and professional development. I love that this has not and will not change...it's what I love about consulting.
Sandeep: I know you're adjusting your work style to COVID. You're still a dude who clearly prefers to drive an hour for a socially-distanced hike or outdoor meeting over Zoom any day of the week :) But personal styles aside, what is specifically compelling about a remote agency during the era of COVID?
Tom: Kunai has been remote for years, which gives them an inherent advantage. There is something about the communication and management styles that just works in a way that other organizations are still figuring out.
Sandeep: Yeah, I think what a lot of people fail to realize is that remote work isn't just office work over Zoom. it's an entirely new paradigm. There needs to be an understanding for asynchronous efficiency...and this just takes time and effort to develop. How do you approach remote work and family? What are you learning about separating work and personal time?
Tom: No matter what the form of interaction, Focus. Be present. Quality over quantity. The best weeks are the weeks where I proactively schedule work and personal time. Neil (Kunai's Head of Delivery) shared a great quote with me "With discipline comes freedom." When I am proactively addressing the majority of my professional and personal commitments, I find I earn a little flexibility. A little freedom.
Sandeep: Tell us about a business hero of yours that I may not have heard of before.
Tom: Paul O'Neill is someone you may not know. His work in both the public and the private sector created a profound impact
Sandeep: We are both over forty years old :). How have you learned how to work smarter during the past decade or so? What do you wish you knew about consulting when you were 25 that you know now?
Tom: Consultants want to make lasting change. Lasting change is often not the act of a single person. Today I work much harder bringing others along on the journey.
Sandeep: Last question. What are you doing here? :) Why join a small consulting company this late in your career when you could have a cushy job somewhere else?
Tom: I love a good challenge personally and professionally. When I turned 40, I decided I would run a 10K every Thanksgiving weekend and try to have my finishing time be less than my age. With the exception of one year where I did not run due to a health issue, I have met the goal. I also recently completed the Leadville 100 Mountain Bike race. So, I guess I'm here because I'm a glutton for punishment :) Jokes aside, our customers have a job to do and I intend to put Kunai in a position to execute flawlessly on their behalf. I love committing jointly to audacious goals for our customers and our business.
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