The way we work has changed rapidly in 2020 – but which changes will last?
2020 happened. Our lives changed. Business changed. And customer expectations changed along with it.
We’d already waded waist deep into cashless society but now we’ve truly taken the plunge. In reaction to the accelerated change, the UK’s Royal Mint have planned to make no new 2p or £2 coins for the next decade because there’s too many in storage. Even POS transactions are reducing, bowing out to digital commerce accounts. And when we do go into a store, chances are, we won’t use a bank card but a banking-as-a-service system such as Apple Pay or Google Pay.
Of course, that’s just the tip of the iceberg. Since everyone started trying to avoid COVID-19, it’s become standard to pay for meals, coffee and beers without approaching a bar or waiting for anyone to take your order. Instead there is an app for almost every chain on the high street – and even independents are following suit.
Just as we’ve been minimising physical interactions, the steps between payment and delivery of a service or product are also reducing. Well before COVID-19, Uber and AirBnB and many others made the payment process so seamless that customers and clients barely felt it happening.
We assess value differently now
This rapid and seamless experience is fast becoming the expectation of customers now, regardless of whether that customer is a business or a consumer.
And it is the expectations that are important. Because while much of the technology already existed before COVID-19, the pandemic forced new behaviours which changed customer expectations around transactions and payments. People are no longer waiting in line or standing on tiptoe to spot a face. Instead they’re downloading the app and dealing with the interface.
The narrative of accelerated change is the oft-repeated story of 2020. The signs were already there in the habits of the younger generation, in the rise of digitally native companies, in the budding and booming of banking-as-a-service. You could have seen it coming. But no-one saw it coming this fast.
We’re almost certainly going to leave constant travel for meetings in the ‘artifacts of the early 21st century’ pile. Initially these were perceived to be less valuable online – but now that behaviours have changed with the pandemic, people see value differently. Now we’re weighing up costs without trying to add the millstone of the status quo into the balance.
Our appetite for in-person interactions at work has shifted. Although a few companies may attempt to bring a five-day working-from-the-office routine back to life, most businesses are never going to go back to it. Lockdowns forced companies worried about accountability to take the leap of trust with their workforce. And now that a new norm is established, companies will be relying on other measures to keep their employees engaged.
Our pre-conditions for trust evolved
That necessary trust leap has also played out in electronic contracts, which have become more acceptable for hiring someone or making business deals. Digital signatures and identities are carrying as much authority as the scribbles we used to make with pen and paper.
More generally, the pandemic has triggered a greater trust in digital processes. Compliance and security is presumed when it comes to online payments and sensitive data. People are making fewer mental checks when pulling their data from their LinkedIn or Facebook page into a new app, or one-click ordering through a company that stores your payment information.
The 2020 McKinsey Global Payments Report documents how buying behaviour has not decreased but simply changed focus. Businesses are opting to settle bills online, while consumers are gravitating towards apps to shift money around. And companies that invested in instant payments are reaping greater benefits than before.
And this mindset has permeated businesses on a macro level – whether they’re integrating all their information through Zapier or handing over their analytics to Clearbanc to find quick financing. Trust is formed without a handshake and sometimes without so much as a sales call.
Our confidence in digitally native companies has increased. The knock on effect of this is that SaaS businesses are going to keep soaring. If there’s a software alternative to an almighty hassle, we’re going to take it. And that is going to encompass banking too.
Embedded banking became necessary
Back in 2019, Angela Strange, a general partner at Andreessen Horowitz, stated that “every company will become a fintech company.” And after 2020 this future doesn’t seem distant at all.
Traditional banks were already closing branches but in 2020 they’ve had to break into an undignified sprint to catch up with the offerings of digital-first companies. The latter of which are realising banking doesn’t have to be the enigma it has often been presented as.
Businesses are starting to see that if we can integrate software and harness APIs to reduce our admin and optimise our workflows, we can also use the same tech-driven principles to sidestep unnecessary costs and banking bother. Or even leverage their own banking services to enrich brand offerings and better workforces, like Wagestream.
The rise of remote working, together with software solutions that use their own banking system, make contracting knowledge workers a simpler affair for company and freelancer alike. And as the gig economy becomes more accessible, companies that wish to engage, motivate and retain their workforce can draw on the same embedded banking logic.
You can see this in the work of ThanksBen, who used Weavr to power their marketplace for employee benefits. Employees need more financial autonomy in a remote work world. And systems that allow companies and employees to handle finance without actually touching it could well be the answer.
The behaviours of consumers, companies and even entire sectors are changing. And while digitally native businesses are seeing the benefit, the greater profits will belong to those who look beyond handling information flows, to managing the associated money flows as well.
Interested in becoming a financially integrated digital business? To our knowledge, Weavr is the only company offering an API-first bank account for businesses, along with easy to use tools to integrate banking with digital applications. We make the process easier, more affordable and faster than any other embedded banking solution. Get in touch with us to discover just how quickly you could be generating revenue and going to market.