Will digital finance companies continue to impact so many of our daily lives?

Across the world in 2015 digital finance services will become increasingly widespread. Within South Africa, it is no different, with large numbers of people being pulled towards less-mainstream financial services like online lenders instead of high-street banks.

Craig Whittaker, a tech expert in South Africa said, “Companies are shifting to digital platforms to improve convenience, access, and scale faster than more traditional means, which is incredibly beneficial for the evolving needs of their customers”. He says it’s clear that financial service providers need to change the way they operate, by interacting with customers who belong to generation Y, who are more computer-literate and mostly use smartphones and tablets to communicate online. Craig works for Wonga, who is currently providing cash loans to thousands of South Africans annually.

Generation Y is made up of individuals born between 1980 and 2000, the generation of online which will before too long be looking after all of our interests. Whittaker went on to say, “As early adopters, this generation is not only more tech-savvy but also more accustomed to convenient and transparent self-service digital channels, preferring to take more active control of the transaction process. Mobile, smartphones, and tablet devices are increasingly this generation’s preferred means of online engagement”.

He also spoke of how the increase in internet use and mobile adoption has given financial services the push they needed to expand and create products in the online space. He also believes companies should look to develop strategies that understand changes in customer behavior depending on whether they are using a computer, laptop, smartphone, or tablet. He says, “This has resulted in a greater focus on user experience, functionality for specific devices as well as session continuity across devices”.

Mobile phone and tablet applications are now leading the charge for online banking and finance, just take a look at this Wall Street Journal article. This shouldn’t be too surprising, as a significant number of people spend a couple of hours each day on finance-focused apps. South African people are following the world trend of becoming increasingly reliant on smart devices like smartphones and tablets, and digital financial companies must evolve quickly to keep up with their consumer’s needs. Nowadays, any financial company that refuses to create a mobile application is putting itself at an immediate and potentially crushing disadvantage. It is worth mentioning that the biggest hurdle to overcome for financial institutions is the need to ensure the applications and programs they create are sleek and easy to use. An app that doesn’t take you where you just pressed, or one that has a cluttered homepage will drive customers towards a different company. Due to the immensely high quality of so many applications in this day and age, anything but near perfection just won’t do.

Whittaker concluded his comments by saying, “with a continued focus on improved security features such as data encryption and authentication protocols more people will be willing to transact online in the future”. However, it’s clear that in the customer’s mind how smoothly the app runs is just as crucial as data encryption and general security.