Amazon recently announced its plan to offer an Amazon Echo Dot smart speaker targeted specifically to children 5 to 12 years old. While the connected device won’t allow children to make purchases or place phone calls outside the home, it will let them to access books, music, podcasts, and other content by simply asking Alexa for it using the voice assistant.
This announcement reinforces the trend that as consumers, when we want something, we want it now. Connected devices and other services provided by Amazon—such as grocery delivery and two-day shipping—provide the convenient, fast experience that consumers today expect. But what does this all mean for financial institutions?
Service on demand is the norm
It’s no secret that children today are basically born with a smartphone or tablet in their hands. In fact, one of the most heated debates in child development is about limiting screen time for toddlers. But what about a device that enables a five-year-old to demand it to read her favorite book, or play her favorite song at any time?
Whatever you may think of this development—and there are parental controls—there’s no getting around that our youngest generation will be shaped by technology, even more than Millennials. Devices such as Echo Dots for children further engrain the expectation of instant, easy access to any product or service. Previously, a child would be forced to wait for mom or dad to turn on the radio or have a book read to her. Now, with technologies such as the Dot, children will only continue to become accustomed to accessing anything at any time.
With the exposure to companies such as Amazon, Uber, and Doordash, quick, easy service is no longer a luxury, but rather an expectation for all brands. Just a few years ago, the only thing that could be delivered directly to your house was pizza and a few other specialties. Today, you can have virtually anything you want to eat delivered to your front door, often in a matter of minutes.
The UX discrepancy at FIs
Unfortunately when consumers interact with their financial institutions—brands that 59% of adults interact with on more than a weekly basis—this same experience doesn’t seem to be as readily available. Financial institutions must first consider regulations and compliance before taking any action or adopting any technology. Most of this is for good reason—to protect consumers. However, it slows the rate at which financial institutions can adopt technology, which in turn creates a discrepancy between what consumers expect and what financial institutions can offer.
It’s more important now than ever for financial institutions to digitally reinvent themselves. Though budgets may differ and launching some earth-shattering product may not be plausible or even logical for most financial institutions, it’s vital that the technology these organizations leverage is modern, scalable, and able to quickly follow market leaders and consumer expectations—especially those of Millennials and the emerging Generation Z.
Previously, when a new technology or product became available, financial institutions might take two, three or even four years to implement. If institutions want to remain competitive in the current environment, they must have the ability to adopt and implement new technologies within a few months.
“Connect the Dots”
As toddlers are being exposed to connected devices during their early years and will never know a world where they can’t easily have virtually anything delivered to wherever they are within hours, consumer expectations are only going to become higher and more difficult to meet. Instead of being intimidated by these changes, financial institutions have an opportunity to leverage modern solutions to meet customer needs. For example, Echo Dots for children are a great opportunity for financial institutions to use gamification to offer simple financial and educational tools for children, boosting relationships with both youngsters and parents.
The world can’t survive without financial institutions, but that doesn’t mean the institution can afford to continue to rely on dated technology. Times are changing more quickly than ever before. Financial institutions must embrace the change, or risk becoming irrelevant.
About the author
Eric Brandt is a market analyst for D3 Banking Technology.