September 21, 2020 by Greg Meckbach
Concerns over the risk of COVID-19 transmission could accelerate the changes that technology has been bringing to financial transactions, including contactless payment options, a commercial broker suggests.
“Financial services are changing very quickly,” said Mark Morency, senior vice president and financial institutions practice leader for Gallagher Canada. “They were before the pandemic, and interestingly enough, now even more so because of the pandemic. Over the coming months and years, you are going to see truly contactless options that transmit payments. Mobile methods, like using text, are going to gain a lot of traction and change the way point of sale experiences happen.”
COVID-19 was declared a pandemic March 11. Health authorities are warning consumers about the importance of frequent hand washing, especially after touching surfaces that many others have touched with their hands.
Credit and debit cards with chips reduce the need for consumers to touch surfaces but have not completely eliminated the need to handle frequently-touched items, Morency suggested during Gallagher Talks, a recent webinar.
“The adaptation towards contactless payments has been under way for years,” Morency said during the session entitled, What’s Going on in Fintech. “The pandemic has prompted us to re-consider whether the solutions we have been pursuing are really contactless enough.
“Canadians interact with fintech a lot more often than we think we do,” Morency said, citing the Interac system as an example of fintech in Canada. “As technology has evolved, Interac has evolved. Often it looks like you are only using the bank’s system, but it is really a well-funded fintech company.”
Take email money transfers as an example. “You don’t necessarily realize this is a fintech thing,” Morency said of e-transfer. “While all banks offer this, it is actually a service of Interac.”
During the pandemic, borrowers and lenders have had a vested interest in avoiding in-person meetings to exchange funds.
“The dark side of this that we have to be aware of is fraud, money laundering and cyber crime,” said Morency. “The virus is changing the way that we operate, which is also changing the way criminals do things and how banks have to mitigate these risks. The push towards digitization comes with its own risks and results in some unintended consequences around IT security and fraud risks.”
Feature image via iStock.com/Lena_Datsiuk