Are we on the cusp of the next major wave of transformative digital services? Yes, according to a new report, The Era of Living Services by Fjord, a design and innovation consultancy and Accenture Digital, which offers business and technology services.
Living Services are the result of two powerful forces – the digitization of everything and "liquid" consumer expectations, in other words, people want what they want, when they want it. The study authors explain that living services respond by wrapping around us, constantly learning more about our needs, intents and preferences so they can flex and adapt to make themselves more relevant, engaging and useful.
Over the next five years, according to the report, sensors, the cloud, connected smart devices and real time analytics will combine to deliver a new layer of connected intelligence that will revolutionize the ability of brands and organizations to offer increasingly indispensable digital services to customers. Living Services are highly sophisticated and able to constantly learn and evolve, almost as if they are alive.
If it sounds otherworldly, it is, but not for long. It is likely to be reality. Living Services will impact all facets of life including our money.
The report predicts that banks will increasingly offer customers a timeline where, past, present and Living Services (future) become an illuminating lens. For example, "Why is my balance like it is? What am I safe to spend now? What will my money look like in a year’s time?"
There will be a shift from a "statement" based mentality to an expectation of fluid snapshots of our wealth and status. Gradually this will change the shape of what banks have to offer.
"The move from static monthly statements to fluid ‘snapshots of wealth’ further supports the consumer empowerment trend we are seeing today," says Steve Shaw, vice president, strategic marketing for the Digital Banking Group at Fiserv. "Consumers want more active and up-to-date views of their financial situations, and technology gives them this access and control."
Financial institutions can use these snapshots as a way to drive greater engagement with their customers. By presenting the snapshots as a value-add, they position themselves as a trusted-advisor, rather than just a holder of money, points out Shaw.
Financial institutions can also take advantage of the greater opportunity for cross-selling and upselling in the digital channel with this tool. "As consumers gain greater insight into their financial situation, they are more open to looking into other products and services that are tailored to their needs, at the time that they need them," says Shaw.
Digital transformation has changed the model of banking from something I focus on once a month, to now being part of our everyday lives. "With disruptive innovation happening across channels, and consumers using multiple devices and touch points, the customer relationship has evolved," says Shaw.
This is a significant opportunity for the industry. "Financial institutions need to take advantage of this transformation and be at the forefront of their customer’s financial lives, or disruptors will take away mindshare and wallet share," says Shaw.
So what might Living Services look like?
Expect self-checking statements, digital receipts will be routed to banks for automatic checking against our spending history, which then alerts us to anomalies.
Information about today will help us have a more stable tomorrow. Banks will predict our probable financial future by aggregating past behavior, allowing them to offer preventive advice for those who are about to go into debt. Your banker essentially becomes more of a financial advisor.
The report highlights the overall goal. "The ambition will be to link your bank (think money plus data) to other areas of your life." For example, if your bank account knows your power consumption, it could predict your future financial state more accurately. If your bank knows you are traveling, could it proactively negotiate better currency rates from ATM providers or foreign exchange dealers? Or set and negotiate the best gas prices as you are driving and prepay so you can drive away without physically handing over money?
The possibilities are endless.