As we prepare to say goodbye to 2020, we should expect the pandemic-driven growth of digital channels this year to continue in 2021.
“Digital transactions will definitely continue to become more widely used and even expected when it comes to spending. For all the challenges that the pandemic has brought about, it did push businesses into speeding up their adoption of digital channels to reach and interact with customers. Before the pandemic, these digital channels were primarily seen as a ‘nice-to-have’ option for lenders and businesses but today (and going beyond 2021), they are must-haves for any company to survive and capture their target market,” TransUnion Philippines President and CEO Pia Arellano told Digital Life Asia.
Evolving consumer needs
The COVID-19 pandemic has forced many Filipinos to embrace the digital lifestyle, and this change in online consumer behavior is not going away, even after the pandemic ends.
For businesses to address these changing needs, they need to do more than just provide digital channels.
“Consumers are now getting more and more used to simply shopping on their phones or applying for credit on these digital channels. This is a trend that will only increase even beyond the pandemic and businesses will have to adjust to meet these evolving demands. Simply having a digital point-of-sale transaction available is not enough for businesses to remain competitive. Businesses’ digital stores must also be frictionless and hassle-free because inconvenient digital journeys would just result in consumers abandoning their carts or applications.
“Moreover, ecommerce fraud has been on the rise as an unintended but inevitable consequence of businesses adopting digitization, so companies will need to ensure that their consumers (and their business) are protected from fraudsters as well. Fraud prevention solutions will be in demand as businesses ensure that their customers can safely and confidently transact with them online,” Arellano said.
Financial and credit health
With the government and business sector encouraging consumer spending to help the economy recover, how can the public balance this with the need to maintain financial and credit health?
“TransUnion always recommends that consumers maintain their financial and credit health regardless of what state the economy is in. Consumers can still spend responsibly even during the current downturn.
“It’s also worth noting that we are seeing trends of recovery in recent months. The rate of unemployment, for example, is slowly stabilizing compared to its rise when the lockdown began back in March. Even the freefall of decline in private consumption and spending is slowly beginning to stabilize in recent months due to more lax lockdown restrictions. Ultimately, the economy is going to stabilize and as it does, consumer spending will continue to trend upwards.
“All of these show that while the state of the economy is still a far cry compared to the same time last year, it is improving,” Arellano said.