Digital transactions have soared in terms of the number of users and the number of transactions per user. This has been partly driven by the pandemic; however, the lifestyle and technological changes associated with the online boom mean that current levels will be maintained.
How should businesses be approaching this? To assess what the change means, Digital Journal spoke with David Bernard, SVP Strategy, Marketing & Digital of Global Decision Analytics at Experian.
Digital Journal: Your recent Global Insights Report found that there has been a 25 percent increase in online activity and that the increase is holding steady. Do you think we will ultimately see a decline?
David Bernard: The shift to digital transactions was already taking place prior to COVID-19 and the pandemic simply accelerated it. We believe the increased use of digital is here to stay and that businesses must continue to transform their operations to ensure they are providing the best possible digital experiences. In fact, the trend toward digital seems sustainable given the option to return to in-person banking and shopping hasn’t thwarted those behaviours. My own view is that as digital experiences get better and better, consumers and businesses will do more and more online because of the speed and the convenience.
DJ: Has the pandemic impacted customer loyalty at all?
Bernard: Before COVID-19 and throughout the pandemic we’ve studied the changes among businesses and consumers and published these findings periodically in our research reports. In June 2020, we found that two-thirds of consumers across the globe had remained loyal to their favorite brands during the pandemic. However, our recent data analysis show that as people begin to spend again consumer loyalty to online businesses is weakening. In the last year, from October 2020 to October 2021, there has a been a 6 percent decrease in the number of consumers saying they are staying with the same brands they used prior to the pandemic. We believe this presents both risk and opportunities for businesses.
DJ: What are businesses doing to respond to these shifts in behaviour?
Bernard: We are finding that companies are leveraging advanced analytics and decisioning technologies to improve the digital customer experience and grow their businesses. According to our research, 90 percent of companies are investing in business automation, 76 percent are improving or rebuilding their analytics models and 65 percent intend to increase fraud budgets. This is critical for businesses as they navigate heightened customer expectations and increased competition.
DJ: What other trends do you think we will see as we continue to move into business as normal?
Bernard: We also found that confidence in on-demand, cloud-based decisioning has grown to 81 percent, up from 72 percent in the past twelve months. We believe scalable software solutions are leveling the playing field for businesses of all sizes to provide better digital customer engagement and compete for the digital customer. Also, we expect to see the need to access data and integrate credit and fraud risk decisioning technologies to become increasingly important for businesses to meet the customer’s expectation of their digital transactions.
DJ: Where there any additional findings from the study?
Bernard: We found that the top investment is digital decisioning software, followed by artificial intelligence, and digital enablement for staff. Advanced capabilities that may have not been available to traditional or mid-sized lenders in the past are now accessible. And they’re accessing decades of decisioning best practices coupled with leading edge analytics which is helping to achieve their growth ambitions by attracting, acquiring, and managing more customers. In a sense, we are seeing a democratisation of decision analytics for all lenders and businesses, regardless of their size and heritage.