Really Thinking Outside The Bank

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I was lucky enough to be invited to a panel discussion recently and given the privilege and opportunity to express my opinions about what digital means to banking. What became apparent from the discussion and questions was most people link digital to . If not about technology, it was about how new development was undertaken; be more like the fintechs, don’t fear failure, etc., etc.

But to me such discussions miss the point entirely. While no doubt there’s an element of being digital in back office efficiency (such as robotic process automation) the real digital focus for should be in creating market differentiation.  Differentiation won’t be achieved through making processes faster and more efficient.

Recently, when taking a more design-led approach to digitisation and removing the constraints of the current offerings and technology altogether, I’ve been amazed at the number of simple yet effective offerings banks could make with very little effort. It was during that panel discussion that I became even more aware that people really weren’t, despite the rhetoric, “thinking outside the bank”. Gartner was telling us the two most asked for features were proactive security and some other enhancement to the current standard fair. But that is tunnel vision. Customers don’t expect banks to truly innovate and are used to them remaining confined to the products and services they’ve always delivered.

With the real threat to retail banking being that in the near future the standard offering will be as much a utility service as turning on a tap, concentrating on the water pressure and flow rate isn’t the way to maintain or increase market share. Banks need to offer a compelling differentiation to attract customers as account switching continues to rise. By thinking a little more laterally, this isn’t a difficult thing to do.

I think the blinkered thinking is all down to how analysts and those in the banking industry look at the problem. By focusing on feedback from users of current services and products, the drive is to make these more efficient and with lower friction, moving from multi-channel to omni-channel. But how about forgetting channels altogether? Yes, we need to make whatever the new world efficient and frictionless, but that’s just a faster car, not anything new. Very soon everyone’s car will be faster. The fintechs are starting to reshape the user experience of banking and, like Mondo’s transport for London payment reminder, are starting to look outside of the existing standard service.

This is what I believe banks need to do more of. Whether you use design-led thinking or just sit down and wonder, with the information that a bank has about me, what should it be able to do?

Two examples came to mind on my flight down to the panel discussion. The first was, wouldn’t it be handy if when I landed at the airport my banking app asked me if I am here for business or leisure? I’d choose business and the banking app would now know to tag any payments as expenses, such as the hotel room. When I land back home the banking app, in addition to welcoming me home and offering to call a cab, should ask if that concludes this trip. Answering yes, it would then send me an expense report with digital receipts for me to claim back – even better if it offered an API to my expense system to do this automatically. There’s nothing in this idea that isn’t already available to a bank. They know where I stay, they know how much I’m spending and on what, so it’s a very simple but effective value adding service. Similarly, when I was a one-man-band contractor (like over 3 million others in the UK) I spent £125 per month for an accountant. How many of these potential 3 million plus customers wouldn’t switch if a SME business bank account offered to automate their accounts creation? The bank has all the information and should easily be able to derive the context of the expenditure or prompt via the website or their app for this to be added where there’s doubt (it’s not as if there’s lots of transaction) and by integrating a simple accountancy engine, the bank could spit out the annual accounts and tax return. Add in connectivity to GOV.UK/Verify as Barclays have and there’s no reason it couldn’t submit them for you on your behalf as well.

Neither of these ideas are difficult or ground breaking but I was faced with a sea of blank faces when presenting them. Rather than UK banks spending over £400m trying to convince customers to switch with cash incentives, how about giving customers a real reason to move (or stay put). By truly thinking digitally and outside of the bank? Then simple and compelling offerings can be created that will fight off the threat of the aggregators and . If you’re not thinking in this way then it doesn’t matter how good the user interface becomes or how many keystrokes you remove from the application process. You’re not going to prevent a flash aggregator post PSD2 making your hard work redundant.

Banks need to think not just about cost savings or application dropout (as important as these things are) but also about how to turn the customer and bank engagement relationship from transactional to a valuable daily experience. This means not just replicating what is done in the branch but offering a whole new set of services that may only bring value to the customer and no additional revenue to the bank. But in doing so the banks will have market differentiation and create real benefit for their customers. This, I believe, is the only way to maintain any control over the user engagement channels and not relinquish it to the aggregators but to do so takes a real commitment to thinking right outside the bank.


provide Financial Services Solutions at Fujitsu Digital, and this article was originally posted on linkedin.