Beyond Cash, Debit, Credit — Alternatives Will no Longer be an Option

The pandemic threw traditional technology implementation cycles out the window for many financial institutions as consumers turned to their digital devices to do all their banking. In the PYMNTS eBook, “Endemic Economics: 32 Payments Execs on the ‘Next Normal’ That Never Happened,” NCR President and General Manager Doug Brown says that many executives found a silver lining – realizing they can move faster than they ever thought before while still achieving success.

Digital adoption has been increasing exponentially year over year. But nobody was prepared for the acceleration caused by the pandemic. As consumers across all industries fled to their digital devices to conduct their banking, purchase groceries or order food, businesses were scrambling to serve their customers — speeding innovation and technology adoption at a pace never before imaginable. Restaurants had to find new ways to take customer orders. Grocery and retail stores had to beef up online ordering and staff to fulfill orders promptly. And financial institutions had to implement remote customer service models and enhance their digital offerings to give consumers the access they needed to manage their finances.

For many financial institutions, this pace of change was particularly challenging. Traditional technology implementation cycles were thrown out the window. Technology teams were left trying to implement new technologies from their respective kitchen tables and makeshift offices. And just as quickly as new technologies were being implemented, customer support teams had to learn the technology themselves and how to best support it over the phone, video, text or chat. For many banks and credit unions, this rapid acceleration broke the way they traditionally evaluated and implemented new tech.

The key takeaway? Many executives now realize they can move faster than they thought — and still be successful.

The Rise of New Technologies

Over the past several years, we’ve also seen a dramatic shift in how consumers buy goods. According to Forbes, the adoption of buy now, pay later (BNPL) increased by 30% from 2019 to 2021 among Generation Z consumers. Much of this adoption is occurring among Gen Z and millennials, but these are also the generations that traditional banks and credit unions are often struggling to attract. As BNPL continues to gain traction, it will stress financial institutions as the consumer relationship with credit changes. The simplicity of BNPL is a key driver of adoption, so credit companies and traditional financial institutions will have to get creative to continue attracting new customers. The days of flashy cashback rewards or points programs may become a thing of the past.

And of all technology acceleration, perhaps the fastest-growing is crypto — buy, sell, hold capabilities in particular. Its adoption is happening at an unprecedented pace. Just as every industry had to learn on the fly and adapt at a breakneck pace during the pandemic, the same has to happen now for crypto. Whether it’s a retailer being able to take crypto as a form of payment, or a financial institution offering the ability to buy, sell, hold and beyond, the companies that adopt crypto quickly, and offer a seamless interaction, will be the major winners. While it may be too early to dub crypto the future of money, it’s not going away. And it will continue to become more mainstream every day.