FinTech is helping us to keep our distance – and could restore our faith in the financial services industry in the process

By William Muir, Account Director, Corporate and Financial Communications

Due to long customer life cycles, brands seek to reassure us that we can lean on them during every major milestone in our lives including marriage, childbirth, retirement, and even death.

In order to convince us that we can rely on them, financial services brands set out to gain our trust, and they do this by assuring us that they will be there whenever we need them. Our mobile banking apps provide us with one-click access to customer service representatives and chatbots, we receive emails telling us who to call if we suspect we are victims of fraud, and we get texts telling us when we need to renew our policies in order to remain covered.

This trust has been a difficult sell for our financial services companies in recent years. The 2008 crash, the Payment Protection Insurance miss selling scandal, and an out-of-touch pay & benefits culture have all contributed to an erosion of public faith in the industry. While institutions have talked a big game about being there for customers, there have certainly been times over the last decade when few will have felt like this is the case.

As my colleague Liz Willder pointed out in a recent blog, the  COVID 19 pandemic offers the sector an opportunity to rebuild public trust through genuine, altruistic action taken to protect customers. While a decisive, collaborative and compassionate approach would rightly earn the sector a lot of plaudits and a chance to rehabilitate their public image, it is also worth noting that the industry’s huge effort to digitise in recent years is enabling people to stay at home.

Over the years – and particularly in the past decade – the industry has invested enormous amounts in bringing its services online. Because of its investment in digital services, I would argue that the industry is better placed than nearly any other to empower its customers to socially distance themselves. Nearly three quarters (73%) of us now bank online, which immediately eliminates the need for many of us to traipse to our local bank to withdraw cash and arrange our finances, therefore reducing the potential transmission of the virus.

The sector’s investment in the payment network is also a boon for public health. The payments network underpins a comprehensive online marketplace that is capable of meeting the public’s need for goods quickly and securely from their own homes. Without a payment system that supports mass eCommerce, it would be nearly impossible to enforce the social distancing norms we now practice.

Similarly, the huge growth of the contactless payment network in recent years helps limit the potential transmission of COVID-19 during physical in-store transactions – particularly important when it comes to keeping essential retail workers safe. With that in mind, I was very happy to see the industry take the initiative to increase the maximum contactless transaction from £30 to £45 yesterday.

This isn’t to suggest that the sector can’t do more. Worryingly, older people – who we know are more vulnerable to the virus – are less likely to make use of digital financial services. Statistics show that only 38% of 75 to 79-year-olds and 18% of the over-80s used online banking before the virus hit. While the fact that fewer younger Brits are visiting bank branches and using EPOS machines will go some way to protecting these customers, providers must double down on their efforts to bring these customers online and reduce their exposure.

The signs have been promising so far; banks have been scrambling to get older customers online, while others are letting them bank in branch via a ‘trusted person’ proxy as an interim solution. They have also gone out of their way to ensure that the vulnerable are protected from the spike in fraud that has targeted these groups. However, some of the those most at risk do not have access to the internet whatsoever, and institutions must make every effort to engage with them via other means.

If the sector can succeed in protecting some of our society’s most vulnerable people at a time when they are most at risk, it will go some way towards winning back public trust and rehabilitating itself. In the process it might also succeed in accelerating the spread of digital finance throughout our society, paving the way for future advances across the economy.