PSCU: 2021 Was the Year of Acceleration

2021 saw financial institutions embrace two key trends — personalization and digitization — at an increasingly rapid clip, says Chuck Fagan, president and CEO of PSCU. Expect even more innovation in the year ahead as companies race to differentiate themselves from the competition and meet consumer demand. Read his thoughts in the PYMNTS eBook, “In a Word: 50 Thought Leaders Sum Up 2021.”

At PSCU, we have come to refer to the COVID-19 pandemic as “The Great Accelerator.” Throughout 2021, the economy and its outlook have ebbed and flowed. As a result of the global pandemic, the world has been forced to grapple with varied consumer confidence and spending levels, labor shortages, supply chain issues and more. Consumer preferences rapidly evolved, and financial institutions’ long-term innovation plans became immediate needs. While 2020 saw unprecedented levels of transition and change, 2021 was the year of acceleration. 

The accelerated shift to digital-positioned offerings and tools like contactless cards, mobile wallets, digital issuance, digital banking solutions and more are at the top of FIs’ lists of priorities — and consumer behavior proves this trend is here to stay. 

In PSCU’s 2021 Eye on Payments study, consumers who reported using a mobile wallet in the past 60 days increased by 50% from 2019 (14%) to 2021 (21%), with 30% reporting that they use a mobile wallet at least a few times per month. Eighty-six percent of respondents with a contactless card use it at least a few times per year, as opposed to only 65% pre-pandemic. At the same time, 57% of all respondents utilize digital payment methods at least periodically, as opposed to 49% in 2020 and 42% in 2019. Consumers are also reporting strong interest in emerging payments and offerings such as cryptocurrency and installment payments, or buy now, pay later (BNPL).

Even with the shift to digital, it has become increasingly clear that consumers want and expect personalization. Tech giants like Amazon, Netflix and Spotify have introduced extreme personalization to consumers when shopping online, ordering groceries, watching TV or listening to their favorite podcast. When it comes to what consumers now expect from their financial services providers, they want to do business with a financial institution that knows them personally.

With the acceleration of digital channels and personalization, it is more important than ever for FIs to meet consumers where they are, providing an exceptional experience in the channel — or channels — of their choice. Now is the time for FIs to shift the narrative and define how they can effectively leverage the right tools and data to establish a different kind of engagement model, driven by analytics. This will enable FIs to use data to create connected experiences tailored to consumers’ individual needs. Harnessing data to better understand how consumers interact with their financial institutions — including how, when and through which channel they transact — will help fuel proactive connections via multiple channels.

Looking ahead to 2022, we do not expect this acceleration to slow — just the opposite, in fact. FIs should embrace acceleration and maintain the positive momentum we collectively experienced in 2021 in order to continue providing consumers with the right mix of tools and solutions for seamless, connected experiences.