Banking: From The Outside In


Hello!

I’ve put together a few thoughts on what I think banking could do to make it a little better moving forward. I’ll cover off some of the challenges on the way, and what we might expect to see in the mean time. Feel free to message me that my thought process is a load of waffle, this is strictly my opinion only, not necessarily a bank’s view, or, one of the wider market. I’ve included some controversial ones for fun.

The ideas pitched below can vastly be compartmentalised into three categories:

1) Personalisation
2) Product reshaping
3) Place 

Before I dive in, I want to draw attention to Roisin Levine’s blog on the evolution of the banking app. There were a lot of good takeaways summarised here around digitalisation. I particularly liked the commentary around bringing transactions to life with logos and more accurate retail names and descriptions.

PERSONALISATION

Personalisation is the obvious one to start with. We have seen a greater personalisation across banking. The likes of Starling, Monzo and Revolut really drove this change sporting millions of customers, to the point we can’t really call them ‘challenger’ banks anymore.

To stay with the idea of bringing transactions to life that Roisin mentioned, I love what they are doing at Flux in terms of receipt level data stored within the transaction. As a bank, I wish we got to see what our customers were spending on at a more granular level rather than just at which retailer they spent a total amount for.

Transactional behaviour

This isn’t because I want to infer that if you buy Yorkshire puddings from M&S you are more likely to default on mortgage payments or anything like that. More so to understand customer spending patterns, order of events, and transactional behaviour. Can we start to understand our customers better then be able to help them through what we offer?

Club card and debit card infusion

I would like to see more integration between retail stores and banks in terms of virtual club cards linked to bank accounts. TFL let me tap my card that is linked to my oyster account, why can’t the local clothes and food stores do similar? Retailers get the benefit of associating debit cards to households. Banks get the benefit of seeing what customers are buying from retailers. From a data perspective, I am dreaming of some financial event tables held at transaction level with a receipt array with the retail item, cost and quantity. That would be pretty neat.

Personalised freebies and services

How does a bank attract new customers? I remember Marcus savings account launch with the best interest rate on the market at the time. A real shock to the market, this was one of their USP. Since then, we’ve seen some niche services focus on other product offerings to attract customers to sign-up. For some people the idea of having a ‘green’ bank may be attractive, some may go for the UI, and some may go for the free benefits. ESG focus may play more of a predominant role in what attracts customers to companies as a whole.

I do wonder if we will see a shift away from interest offerings and more thought go into ‘benefit packages’ or ‘add-ons’ like you get now with your phone bills. One of the perks of having a Lloyds Club account (£3 a month unless you deposit a certain amount) is you can get cinema tickets or a gourmet society card free of charge. For someone who likes to go out dining, the GS card is great. Yes, I did just plug Lloyds Banking Group – ha.

At the end of the day, what do you want your bank to do for you? Are you in it for a wooden or biometric debit card, a shiny app or somewhere safe to store your pennies? Do you want offerings as part of this or are you happy with your 0.1% saving rate?

It’s important to remember however, if you get the service for free. You are the product!

Custom texts and notification services

On the customer facing side, I wonder if we can amend notifications and texts to be based on what we want as a customer. Take for example this print screen of charges. It would be cool to put my name at the front for a bit of personalisation in a notification. Can I change the message content slightly too?

These are probably automated for bank regulatory purposes, but I mean the equivalent push notifications, I just didn’t have an example screenshot!

From a bank perspective it just means they will start charging me, but I’d like the option to set text reminders at certain levels for example “CJ, your balance has reached £ xx.xx”. I hope there becomes greater personalisation and freedom in terms of frequency, type of notification and push times. One thing I have liked recently is knowing when my direct debits are coming out and the impact of that. Similarly, some push notifications of ‘happy payday’ are good to see!

At this point, do I just want to be friends with my bank?

Smoother transactions

I recently closed my Barclays account (sorry), but I did love the PingIt app. It was probably one of the easiest ways to send money to friends via phone number. Any way a bank can reduce the number of clicks through improved UI will be great. Not that I set new payees up often, but when I do it’s such a pain. The concept of number of clicks can be applied across banking apps as a whole. Which reminds me, builtformars is probably one of my favourite blogs I’ve read around the UX of banking apps. There are 6 chapters ranging from opening account, making payments, and reaching customer support.

Built for Mars

I’ve done a few data projects looking at the clicks of a journey through the app, it’s always interesting to see the pain points for customers clicking forwards and backwards through a process where the entry was made incorrectly. This can be a red flag signalling design or usability errors. The more difficult something is to complete the more people will put it off.

In theory, If you have 6 steps from the point of signing on to making a payment and complete all 6 in order in quick succession to then sign off that’s a win. If a customers logs in, can’t find the pay section, add the details and gets stuck at step 5 before realising they got step 4 incorrect and signs off this is a major flaw in the user experience and potentially interface. Digging deeper into the ‘conversion’ rates and success markers are always fun!

More analytics please

Maybe I love data too much, but I want to see more of it. I want to see it in greater depth too. Most of the summaries are at a very high level. It was a great milestone when challenger banks added into their apps, spending by month and started compartmentalising them into bills, services, groceries, etc. I’d like the ability to dig into this a little further, how is it shaping up over time, what is the month on month spending, can I see this graphically? Do I eat too much food at Christmas? Have I ordered too many takeaways this month? Does the bank know I did dry January? Can the bank help me reach my spending goals?

People spending like you

Following on from that… and I’m not sure people will agree with this one, maybe a bit too big brother. In my head I think people would like suggestions of where they can improve their spending.

We capture an awful lot of demographic data around region, age etc. which can help bucket customers. I guess it would be the financial recommendation equivalent of chatting to your mates at the pub about how to save money, but hopefully with some data to back it up. I’m particularly thinking about the rising Met’s and those just starting out in their career, where generally you’ll be on a similar wage and point in life, you may not have a lid on your finances having not had many jobs before.

Things I ask myself, what is my current spending? How does it compare to others like me? Where can I cut back? Is this even important to me?

In truth, I can’t imagine we will ever see this in banking.

Social Media

This one is another controversial one, especially if you’ve seen Social Dilemma or similar documentaries on Netflix.

Hypothetically, as a customer if I complain on Twitter or Facebook a bank can see that it’s happened but do little to infer whom that customer is when trying to build out a customer journey. That’s why you’ll often see customer service teams try navigate you to ring up the bank where you provide verification or use a web chat service. There is so much data lost here when trying to map a customer’s journey. I would love the ability to associate a specific request or question to an account.

What I’m not trying to allude to: The bank scrolling through your facebook trip photos to the Algarve in 2015, or taking a look at what memes you post on twitter. Just potentially a way to create a link between a message on social media and your account, even if it’s through a special URL click that the customer service team send for that one message/ topic. This would help banks improve their services for customers, especially with the amount of qualitative data to go through and opportunity for sentiment analysis off the back of this. I think customers forget that the different contact channels aren’t as synced up as people presume! (Same with retail stores in general)

PRODUCT RESHAPING

Wishful thinking for the Mortgage market

It’s lucky customers only have to move house a few times in their lifetime. This isn’t really a banking issue per-se, in fact my interactions with my mortgage provider were fantastic and was easy enough to complete, it’s more so when trying to get each piece of the puzzle after in place. I hope one day we consolidate all the different stakeholders in the situation to one online digital platform offering an End-to-End (E2E) solution. There are a huge amount of paper form documents and handling fees that have the opportunity for reform, in what is quite a clunky process. I am hoping the pressure from the pandemic has pushed for new innovations for digitising part of the current process.

In my head I have a master plan of a platform where each stakeholder (mortgage advisor, solicitors to every one else) involved can sign in, log their documents and get sign off online. It could be so much smoother and seamless; it just needs to be pitched to help everyone involved.

I don’t think it’s on the horizon anytime soon.

Saving pot as %’s rather than amounts

Challenger banks are great for this. The ‘pots’ offered by Monzo, and ‘spaces’ from Starling are super cool. I’d like to see the ability to save a certain proportion or amount of my income. The next step is to split this amount out between my saving pots. If I’m saving for a holiday in 3 months, a house deposit in 5 years, and a new car next year, what proportion of my saving should I split between the three pots to achieve all three. Is this realistic and achievable with my current savings I’m putting away?

Some sort of rating of importance and suggestion of how this money gets split into the different pots would help customers learn more about looking after their finances whilst potentially reaching their saving goals quicker.

A space my flat mate and I set up to pay our ground rent and service charge. Could do with a few more quid.

Consolidation of wealth under one roof

So, open banking. I set it up once but fizzled out when having to refresh accepting them to be connected every quarter.

For me, the likes of curve card and Yolt stole the show.

For those that don’t know curve is a payment card that aggregates multiple payment cards through its accompanying mobile app, allowing a user to make payments and withdrawals from a single card. It lets you “switch the bank card you paid with after each transaction is complete.” Honestly, I really enjoyed using it.

As a side story, I got into a habit of carrying just my phone around with me (apple wallet) until I went to do my weekly food shop and their Wi-Fi was down so couldn’t accept apple pay so embarrassingly had to leave my basket and the shop. Anyway, I carry my debit card with me now but I like the idea of bringing them all under one hood.

Yolt was great too. Yolt connect your bank accounts and credit cards to Yolt and see them all together, alongside your Yolt Account. Much like open-banking within the bank accounts was tough when it first started to get everything set up and signed off. I ended up never returning.

I recently saw that Goldman Sachs are adding investing to their Marcus feature, which sounds exciting. I would consider this a positive ‘half way there moment’.

Taking this one step further… I hope to see banks start to accumulate products that define wealth as a whole all into one place. At the moment they sit tidy in a folder on my phone, but I wouldn’t mind it to be all in one app with the ability to show/hide certain balances.

Open-Wealth, not Open-Banking

PLACE

The need for digital

I think we will see further shifts away from traditional banking methods, which brings with it a need for the bigger banks to help up-skill in technology, in order to not leave people behind. I see Lloyds, HSBC amongst others make good headway in this space. Whilst my personal opinion deviates away from having branches I can understand why they are needed somewhat. I’m not sure I step foot in a branch more than once a year. I do recognise the branches benefit a lot of customers, which is important so I won’t go bashing them, but I think solely digital banks do have the advantage here of having everything through one channel. I can imagine mapping a customers journey is far easier where everything is digital. Again, I am dreaming of the data capture.

Out-dated services

I’d personally leave chip & pin, cheques and ATM’s at the door. I read a couple years ago that they were replacing chip and pin ATM’s at some banks in Singapore with QR code. I wonder if the UK will ever see similar due the pandemic will these services change for cleanliness reasons. Oddly enough QR codes have been around for ages, but we’ve seen a massive uptick where bars and restaurants have started to use them for menus and orders.

I can’t seem to dig out the original but here is a recent article where similar is being seen in Switzerland. I think we shall have to brush over the fact the money taken out the machine is probably just as filthy.

Let me know your thoughts on the above.

A few of my favourite places to read more is normally finextra, which I used as a few reference points for the blog, as well as my favourite podcast is normally the ‘This is Money’ podcast, great for comparing bank rates across products.

LOGGING OFF.

CJ

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