Key Takeaways

• The digital customer experience is evolving rapidly, and companies need to keep up.
• Companies should focus on the needs of their customers to provide an excellent digital customer experience.
• The transformation of the digital customer experience will rely on technology, but it will also require a change in culture for most companies.
• Security and Trust will remain key factors for the success of the digital payments’ world.

Imagine that every time a payment is made, money is placed into a wooden box inside a wooden wagon that is pulled by two horses and guarded by a legion of troops. Or imagine that the naval routes still existed to transfer money and gold in ships armed with cannons, under constant threat of facing fatal high seas and ambushes from pirates. Sounds strange, right?

Well, now imagine that, in 2023, a North American bank transfers money to a bank in Belgium using a ship that, at one time, took around 6 months to cross the Atlantic. Imagine if any of that was true, imagine what kind of response we would get from consumers in the market about their experience in the payments system. The comments and feedback would be noisy, simply put.

Stepping into the digital era of payments

Fortunately, things are more advanced now, and thanks to technology and innovation, the world has been introduced to what we know as “The Digital Era,” in which rapid technological change, led by digital technologies, is reshaping economies and societies. Thanks to the recent pandemic, we have stepped into the future at a much faster pace than we anticipated, due in large part to the rapid development of AI and its integration into our daily lives. Eventually, the digital transformation changed the experience of every consumer in the market, affecting the way they live, think, plan and buy.

Only ten years ago, people still had to go to an ATM to withdraw cash to go to a grocery store and buy what they wanted. Now, all we need is our smartphone and our digital wallet. The payments industry is changing rapidly, with consumers and businesses both demanding more from their relationship with banks. Customers have high expectations for the digital customer experience, including efficiency, ease of use, security and trust. This has led to a transformation in how companies do business, as well as an increased focus on innovation.

In November 2022, I participated in one of Payments Canada’s Summit Series, which talked about modern payments for small businesses. I was not surprised to find out that a study performed by Payments Canada showed that around 43% of consumers in the Canadian market are now using cashless digital payments. Similarly, Fintech Magazine published a study in 2019 based on statistics from Europe, which showed only 2% of the payments in Sweden were done by cash, while the other 98% were digital. When you compare this to 71% cash from a decade earlier, per the European Central Bank, it clearly indicates just how quickly consumers are shifting towards digital payment methods.

The importance of digital customer experience in payments

It’s no secret that customer experiences are the new battleground for companies. Customer experience is the most important competitive differentiator and a key driver of growth, loyalty and retention. It’s also a strategic imperative in today’s digitally disrupted world.

For instance, marketplace organizations are required to undergo a digital transformation to rethink how they develop and deliver their products, as well as how they engage with their customers throughout the customer journey. In other words, companies need to focus on delivering superior experiences across every touchpoint in their ecosystem. They will have to focus on the entire value chain, including product development, delivery, service, support and post-purchase interactions. Thus, organizations’ strategies should always put the needs of their clients first and define which customer segment they are targeting before designing anything. This ensures companies offer customers something relevant instead of just throwing money at them by trying all sorts of tactics, hoping that at least something works out well enough for someone, somewhere, somehow at some time!

As a result, we are noticing a proliferation of new businesses that are using e-commerce to target a specific customer segment in the market, such as a company selling wooden bracelets for men. While that might look like a good idea to start with, it won’t be enough. If the customers do not have the ease of access and feel secure in the whole process, the sale might not happen, leading to an increase in the rate of abandoned online “shopping carts.”

As I mentioned before, COVID forced a lot of businesses to divert their focus and strategy towards the digital market. E-commerce is now an extension of purchase activity resulting in more demand on digital payments, which requires an improved payments experience that is easy, fast and seamless.

This comes at a price for the organizations, however, as physical security of their retail stores is no longer more important than that of their websites. Now, all businesses involved in the digital sales should consider improving their security while executing online transactions with customers and third parties.

Where are technology companies like IBM in this?

As a result of these market forces, global organizations have started thinking outside the box and have introduced cutting edge technologies that can create a positive impact in the consumer market to keep their current customers, while trying to attract new ones to expand their market share globally.

As IBMers, we are proud of how our organization has shifted from traditional service offerings and introduced the cloud, quantum technologies and other services, including acquiring key pieces to keep and grow our place and value as a “blue chip” company. IBM’s core values have helped enterprises drive success in this area, including:

• Dedication to every client’s success: IBM continues to be dedicated to our clients and their success. We have led in technological advances, shifting from traditional services to implementing new methodologies that allow IBM to earn and retain the trust of our clients.
• Innovation that matters: With our mantra of “Faster, Better Cheaper,” innovation is the key to looking outside the box and coming up with solutions that will solve a lot of problems for our clients. According to a report that Payments Canada published in August 2022, 50% of small business owners do not feel secure when it comes to digital payments. And as part of our continuous improvement cycles, IBM’s relentless pursuit of security and resiliency has allowed IBM to support our customers.  

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