Financieel Management, Netherlands: Cognizant’s Vice President of Banking and Financial Services Says Banks Need to be the Frontrunner in Contactless Payments

“In The Netherlands, NFC technology is currently the most prominent and visible trend in the banking industry. The advantages are huge, especially for smaller amounts of payments,” writes Sriniketh Chakravarthi, and goes on to outline some steps that can help banks with the implementation of cashless payments. Excerpts:

- Drive an aggressive NFC payments strategy:  Unless banks move to increase their influence in the contactless payment market now, they risk relinquishing much of their traditional role—and fees—to major non-financial players. Banks need a more aggressive contactless payment strategy in the coming years.

- Drive customer-centricity by capitalizing on customer trust: Banks need to invest in convincing consumers that the way banks are implementing NFC technologies is safer, more convenient and more cost-effective than the approach being taken by other companies.  Here, banks have a competitive edge in that customers trust banks more than other companies to look after their money and already rely on banks for mobile banking.

- Establish a robust risk management framework to address privacy and security concerns: Privacy advocates are particularly concerned about this technology; it is feared that having this much information available “in the open air” will lead to problems. Banks must deploy a robust risk management framework in its ecosystem to ensure appropriate controls and mitigation measures are in place to safeguard against vulnerabilities.

- Increase collaboration synergies among the parties involved: NFC-based payments rely a lot on the collaboration between banks, mobile carriers, card networks and merchants. To ensure ‘first-to-market’ with such services, it is important for banks to increase collaboration efforts with the different partners. Also important here would be aspects around data governance and clarify who would manage the solution and control the data.

- Understand customer adoption levels: Dutch banks have to undergo a strategic evaluation of the preferences of their target customer segments and choose a medium best suited to their strategic product positioning objectives. This way they can make sure consumer adoption is maximized.

In the Netherlands, there is a strong adoption of NFC payments, but not all bank cards and smartphones are equipped with NFC technology. Therefore it is very important that banks increase collaboration with third parties and set strategies for a successful implementation of contactless payments.”

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