By Ed Cox, Managing Director, Forward Media
Internet entrepreneur Marc Andreeson famously said that ‘Software is eating the world’, and everyone knows that Financial Services is the next big sector to be Uber’ed. Today, all the talk is of FinTech, and of course, technical innovation will drive a lot of the change in the industry. But right now, I think it’s more important that banks and other finance companies think about how to improve or enhance the customer experience through technology, and not just in rolling out new tech for tech’s sake.
The most successfully disruptive companies of the internet age have always been customer-led. Technology, of course, is the enabler, but merely rolling out an app, or putting some new tech functionality in place, is not the recipe for success. The digital transformation your company needs must be experience-led.
Take Uber for example. It’s not just that it tells you exactly how long you have to wait, or that it saves you the need go to the cash machine. The end to end experience is so frictionless: one tap, no need to input your location, no need to tell the driver where to go, or wonder if you are going the right way.
By way of contrast: a few years ago my local minicab firm created an app – this was a sign of their modernity, their own digital transformation. No longer would I have to talk to a human being to order a cab: the app-based booking process would be fast! Simple! Painless! The problem was, there were so many steps required and fiddly things to type in: for one thing, it asked me for my pick up location, every time! What a disappointment. I just lost interest, so I ignored the app and continued to call the number like before. Needless to say I prefer Uber these days.
It’s been said that these days the number one cause of customer friction in banking is mobile. Banks spent decades figuring out how to make the in-branch banking experience the best it could be, and in a period of about 10 years all that knowledge has become obsolete! Banks have invested in developing mobile banking, but still they provide an experience a long way behind the customer experiences we have on Uber, on Amazon, on Facebook. Most banks bear more than a passing resemblance to my old taxi company, the one I used before Uber. The frictionless experiences of retail, travel and social media are the benchmarks that banks need to work to.
Earlier this year, a news story about a well-known payments business allowing you to validate a mobile purchase by taking a selfie got an inordinate amount of column inches. It’s all very well and impressive that facial recognition is a reality on your mobile phone –but I’ll wager that it takes five times longer than a fingerprint scan.
I don’t get why fingerprint reading hasn’t become integral to online banking yet. Only now are major UK banks such as First Direct and HSBC rolling out with voice and fingerprint recognition. Many of us still have to go through an elaborate two-factor authentication process involving a small 1980s style calculator to access our mobile banking app, when we own phones with a fingerprint reader. The leading smartphones in both Android and iOS have fingerprint recognition and the iPhone has had this built in to its phones since 2013.
It’s not hard to think up other considerable improvements in the overall banking experience, which could be powered by mobile phones. Today’s digital consumer is looking for simple, time-saving, useful and engaging content that they already get from mobile apps such as Amazon, Uber and eBay. Why can’t I just tap phones with my friend to pay him back that tenner? When I swipe my contactless card to pay for something, why can’t I get a quick record of payment, and an update on my bank balance as well? When will I be able to get a discreet alert when a deposit has been made into my account?
Here in the UK, Atom Bank will launch soon as the first mobile-only bank. If it can deliver on half of the opportunity areas, it could make a real impact. Google, and Apple meanwhile remain the big giants with the power to disrupt everyone. They already have the ‘transactional’ trust of half the world’s population as we share our personal data without a second thought. Millennials, and especially Gen Z, do not have the ingrained habits of branch and big name banks. They will vote with their thumbs in a mobile first world of finance. If software is eating the world, it’s time to make sure you are as high up the food chain as you can be.