FIS: Reinvention will be key to recovery in 2021
Trends that were already capturing the market in 2020 have been supercharged by the necessity of COVID-19. Here, FinTech Magazine (FM) asks Bynan (KB) how FIS has been adapting, what new patterns in consumer spending are emerging, and how the industry can stay on top of change.
FM: What effect has 2020 had on FIS’ digital strategy?
KB: FIS has seen such a rapid change in how consumers shop and conduct business in 2020. We have practically moved ahead 10 years in the adoption of digital commerce, including contactless payments, mobile ordering, social shopping and more. This is a harbinger of the power of optimising mobile sales channels for retailers in a post-pandemic world.
FM: How have shopping experiences changed since the pandemic?
KB: Almost overnight, the US required a change in our shopping experience. Instore commerce shifted to be more online. If shopping Instore, transactions needed to be contactless and frictionless.
FIS Prepaid and Government solutions deployed online shopping for 26 states in less than three months. This allowed over 20 million of our consumers to shop online with their SNAP Prepaid Card. Digital enhancements to expand Financial Inclusion for Government recipients has always been a part of our strategy, but the events of 2020 accelerated the need for deployment.
FM: Have financial services matured sufficiently to meet contemporary challenges?
KB: Absolutely. This year did not really present much of an option in having to accelerate and adopt an ambitious digitization plan, and the industry stepped up. More consumers are shopping online or using apps like Zelle or PayPal to make payments.
In our Generation Pay survey, we found that across the board mobile payment adoption was on the rise, with 44% Gen Z and Gen X and 46% of Millennials making payment with a digital wallet or mobile device.
This shift to more digital transactions also requires the industry to change the way we manage fraud. FIS’ 2020 Corporate Liquidity Market Report found that security followed a close second to fraud as the most important reasons for adopting new tech. So, this will continue to be a drive in the acceleration of these digitisation plans.
FM: Do you think customers and ecosystems behave differently now?
KB: Yes. COVID-19 has shifted consumer purchasing patterns in an irreversible way. Our Generation Pay survey revealed 58% of all consumers increasing their use of take-out and drive-thru options to support their favourite restaurants.
One in three people now use digital wallets or cashless payments, with even greater usage for consumers under 55 - a huge shift in payment behaviour across demographics.
These trends were all already present before the pandemic, heading down the path towards wide-scale adoption. However, it was the efforts to minimise the spread of COVID-19 that escalated the movement dramatically for the payments industry. How consumers pay for goods and services has evolved and these changes will likely stick.
FM: Finally, what will change with regards to your 2021 strategy?
KB: Technological innovations have always been part of FIS’ strategy, but the speed at which we deploy will increase. The pandemic changed the way consumers pay and we are committed to finding new innovations to continue to lead the change.
2020 has taught us all to be nimble, flexible and creative and has proven that we can deploy in months, not years. The businesses who jump on board and reinvent themselves to meet this need will be the ones who see a much swifter recovery.
Crypto strategies: Timing the market vs time in the market
There is a lot of surface noise in the cryptocurrency space and most of it is the psychobabble of investor sentiment. One week it is the sound of everybody rushing towards a feeding frenzy. The next the wailing and gnashing of teeth as those near the surface (the ones most exposed) get spooked and rush the other way, falling over each other in the race to escape.
Watching crypto markets in the last few weeks has been brutal viewing; best done on a strong stomach and ideally through your fingers! It’s impossible to know what drives lemmings off a cliff, when they run, they all run the same way at once.
The speculative crypto investor is not always a logical beast, and there seems to be a lot of sentiment where the money is either ‘all in’ or ‘all out’. Crypto is exquisitely volatile, and annoyingly can sometimes defy logic – no-one really knows what is going on. Thankfully the blockchain data has some answers on what the smart money is doing.
Essentially scared sheep are trying to ‘time the market’, traders who are buying and selling short term on a hunch the market is running in their direction, going with the flow in a world where cash is king. Recently the sheep got spooked, their time was up. Unsurprisingly, when the market run is to sell ‘coin’, it turns the asset back into what it sees as the comparative safety of fiat.
Pictured: Katharine Wooller
There is another investment philosophy, one aimed not at spinning-off short term cash but on the principles of accumulating long-term wealth. A far less noisy space where deeper strategic thinkers are quietly building crypto portfolios of significant size, this is where the ‘whales’ (a crypto industry term for those who hold at least 1,000 BTC) hang-out.
Whales have no interest in timing the market, rather their focus is ‘time in the market’. Not driven by market sentiment, their focus is buy-and-hold.
So where does this leave the minnows, the small investor who might be wondering if now is the time to think about cryptocurrency as an asset class to add to a pension or an ISA. Somebody looking to diversify out of equities. A prudent saver who thinks structured saving in a digital wallet is something that would add value to a retirement strategy. Where does the minnow look?
Currently if the minnow looks below the surface, at what the whales are doing, he or she would see something very interesting. Since 19 May's price crash, the bottom feeding whales have been hoovering up BTC. Quite simply, they are ‘buying the dip’ – as the sardines rushed to sell, the whales were happy to hunt in the bargain basement. They have been accumulating wealth.
To my mind, the smart, forward thinking retail investor, with a buy-and-hold mentality, might consider this a buying signal. In which case the question becomes how to dip a toe in the water.
Dacxi has established one of the UK’s leading cryptocurrency wealth platforms, where small to medium investors can buy individual coins or ‘bundles’ of Blue Chip or selected altcoins to build a diversified cryptocurrency wallet.