Technology is changing our relationship with money. Studies have shown that digital wallets are the preferred method for transferring money for 57% of the U.S. population, with over 60 million American adults reaching for their smartphone rather than their wallets. When it comes to international payments however, cash is still king.
Despite this, the introduction of new innovations and disruptor brands are set to change the industry in a major way, especially as more people adopt online and mobile solutions. Once international money transfers are made as simple as sending an email or composing a text, it’s fair to say the path for a predominantly online-based IMT industry will have been paved. Here are the top trends likely to make this idea a reality:
The digital age has seen the rise of non-traditional players shaking up the international money transfer industry. No longer do users have to rely on banks to complete transactions. With the introduction of innovative digital wallet apps, and the newfound attention of social media giants such as Facebook – choice is abundant.
As the market is being dominated by non-traditional services, traditional banks are realizing the need to ‘adapt or die’. We’ve entered a state of transition where providers are being forced to embrace the digital (in all of its disruptive glory), boost user experience, and focus on the needs of the customer if they are to remain relevant in today’s constantly changing tech landscape. This is the push international money transfer providers need to place ‘mobile’ and ‘digital’ at the forefront of operations.
Increased focus on user experience
User experience is pivotal to the international money transfer market. Websites and apps that are clean, easy to use, and designed with the customer in mind, are ultimately the winners of this highly competitive industry. Money transfer providers, new or traditional, need to keep their customers happy with their services. With new players shaking up the market, providing a great user experience will undoubtedly be a requirement to survive. Think: is it easy to complete a transaction? Can an account be made quickly? How long does it take to receive a quote? Is contact information readily available and easy to find?
Providers are not oblivious to the fact that user experience is a requirement if they want to keep customers coming back. If the transaction process is too complicated, or not aesthetically pleasing, it’s all too easy for customers to look into another provider.
New digital-only banks, like Atom and Tandem, are paving the way for an online money transfer industry, where maintaining a streamlined website and attractive apps and tools is the priority for providers. In fact, the average score for the user experience category (70.6%) in our inaugural money transfer awards was acclaimed higher than speed (68.2%), exchange rates (62.4%), convenience (59.2%), and trust (53.0%).
Enter: AI and chatbots
Recent developments in artificial intelligence and chatbots are already beginning to revolutionize the way the finance and banking industry works. As these are improved and integrated into everyday process by a variety of providers, it is likely that these advances are set to define the future of international money transfers.
Already we can see customer queries being answered by chatbots, where humans only need to intervene when tricky questions come into play. As with any new technology, especially where money is concerned, people are usually apprehensive. As digital-financial literacy boosts and people become more open-minded in the ever-evolving fintech space, wanting more interaction with technology will become the mainstream.
Blockchain living up to hype?
Whether the blockchain will disrupt the remittance industry is a hotly debated topic. At the moment, liquidity and a lack of being well versed on the technology are two issues getting in the way of its mass adoption. Despite these current setbacks, if and when this digital network becomes more stable and trusted, it will undoubtedly facilitate global money transfers being conducted in the online realm.
As Bitcoin is a cryptocurrency intended to help people avoid the disadvantages of traditional money transfers, like high transaction fees, lengthy settlement periods, and higher risk, it is abundant with opportunity. One of its affordances is that it was designed and built for the Internet, as opposed to traditional services currently undergoing a state of convergence. It takes time to grow a strong reputation and iron out creases, which means this tech could soon be a key player in the adoption of international money transfers in the online world. Watch this space.
Fred Schebesta is CEO and co-founder of personal finance comparison website finder.com. Fred is is intrigued by digital currencies and is a leading Australian-born entrepreneur based in New York City. He is also an award-winning digital marketer, author, blogger and keynote speaker.