The Financial Services Club's Blog

Banks designed for humans by geeks

I was going to move away from further debate about branch and omnichannel today, as there’s far more interesting stuff about Google giving payments away for free with Gmail and PayPal doing the same with mobile, but that will have to wait until next week as yesterday’s post created quite a stir.

I guess it was the mention of Apple (whose glossy rosy tint has reduced of late).

Or maybe it is that core message about designing for humans rather than money.

In fact, I did toy with the idea of Banks designed for humans, not geeks as a title, as the techno crowd fall into the same fervent misnomer as the branch crowd.

Equally, most get this wrong because they built their operations for one point of emphasis – branch, call centre, internet – and now are struggling because no longer do we deal with channels, we deal with a human at their point of need or want or desire or thought.

This is what the data geeks are really drilling down for: to get to the customer 24*7 as they have financial needs, wants, desires and thoughts, and that is why today's title is Banks designed for humans by geeks. 

Banks designed for humans, not money

I was in an interesting debate yesterday about the future of banking, as usual, and the future of branches, yet again.

It was all interesting stuff.

Then one of the presenters – a design agency that created and designed the Apple stores – talked about designing branches for people, not money.

Not bank branches again (yawn, zzz, duh, wtf)

The hardy perennial discussion of whether we need branches or not comes up again this week.  It’s a regular debate on the blog and in the Financial Services Club, with various entries that are relevant to contribute towards the debate:

• To dump or not to dump the branch (2007)
• Branches Wanted: Dead or Alive? (2009)
• The branch-based banking model is dead, Part One (2009)
• Branch-based banking is dead, Part Two (2009)
• Bank branches are not dead (2011)
• Do banks need branches? (Financial Services Club Debate, 2012) 

It is a discussion that never goes away because no-one knows the answer.

Predictive, proactive, proximity based payments

After my discussion about the augmented economy which focused upon customer service, I thought about it from the other side: transactiosns.

Many years ago, my technology firm made a play for banks to deploy data warehouses to perform predictive analytics based upon consumer propensity models of their data-based behaviours.

It may sound a little complex, but basically it was meant to use data patterns to predict what the customer would do next and whether they might need some new financial service. 

The augmented economy

In the middle of my showreel, I talk about augmented  lifestyles.  I’ve talked about this for many years, but now it is becoming an augmented reality, especially with the launch of Google Glass.

The future is visual banking (still)

One of the discussions I was having recently was around a future vision for banking, and the idea of branchless banking reared its ugly head again.

As mentioned many times, I don’t believe in branchless banking in the future .. just less branches for banking.

Anyways, this discussion veered in another direction that also rang my old bells: remote visual banking.

Just as we Youtube everything, the idea that your banking would be serviced through a remote advisor who you could chat with onscreen came up as the ideal way to be serviced in the future.

This is a theme like branchless banking, cashless society and biometric authentication.  It keeps cropping up and then disappearing again.

The question is: can we really have a future where the bank deals with customers via remote visual media?

Yes.

Creating an agile, designer IT Shop from a CIO who knows how

Time to head home after a day in India at the launch of the new design centre for finance launched by Polaris Financial Technology in Chennai (Madras for the old folks out there).

As you walk into the Design Centre, you are greeted by a map of the world ... completely made out of Indian Rupees!

A fascinating trip, not least because Polaris has injected something into software development that I have not seen before: creativity.

This was clearly demonstrated by Michael Harte, CIO of Commonwealth Bank of Australia (CBA).

Over the past five years, he has replaced the bank's core systems, moved much of the banks services to the cloud, created many apps and innovations that have given CBA global recognition and more.  

Banks are just data vaults

There have been several themes I’ve explored on the blog lately that are the foundations of my latest presentations:

• Mobile is irrelevant, it’s the behaviours that are key
• Money is meaningless, it’s the data that is important
• Capitalism is dead, we are now ruled by social capitalism 
• Privacy has gone and security is our greatest risk

The themes of all of these blog entries are that banks need to think about how they reconstruct themselves for the 21^st century.

What this really comes down to is that banks are becoming pure managers of bits and bytes of data.

Don't forget socialisation and gamification: tomorrow's banking today

Building upon the discussions about personalisation and virtualisation, these are important.  In fact, as I’ve mentioned before, personalised, virtualised in real-time on my mobile is PFM-squared (does any of that last sentence make any sense?).

So then I was recently asked to address a conference with a mix of banks from all sectors, and to give examples of innovation in each of these different banking sectors.

The examples I picked had one common theme: social finance.

From personalisation to virtualisation: tomorrow's banking is here today

Checking out this morning’s news , I discovered this new innovation from Wells Fargo where you can get personalised ATM messages.

If you didn't think a payments revolution was taking place, think again

If you didn't think there was a payments revolution taking place, then think again as dealmaking websites like Groupon, Living Social and Huddlebuy have been pushing payments systems. 

It makes startling and notable change when you see consumer-based services pushing merchant and business based services at low cost.

The bank that removes the friction will win

Talking of no-one giving a jot about customer service in banking, there is a subtle nuance here which I thought someone might have spotted or commented upon but …

The nuance is that any organisation that takes friction out of the transaction process has the potential to change banking considerably.

There are several examples of how such friction removal or rather frictionless commerce occurs, and they are all the subjects we usually choose:

Try to destroy yourself … and then do it

One of the panellists at this week’s conference said that he employed twenty people whose sole duty was to find a way to destroy the business.

I liked the idea of that.  It is a strong and emotive statement.  But what did he mean?

“I employ twenty people in my innovation department who purely look at ways in which they could destroy the current business.”

RETAIL (????) Banking ... you must be joking!

I was at a conference yesterday where a leading economist talked about the global economic forecasts and specifically about the UK.

When he got to the UK, he started talking about which sectors were expanding and succeeding the most, citing the telecommunication, transport and logistics areas as those with the greatest opportunity.

In other words, people doing business on the internet and ordering stuff for delivery to the home or office.

Can banks meet the hybrid challenge?

It’s taken me a while to work out why  social media and stuff is such a fundamental change for banking, but I finally think I've got there and it's clearer.

It started with the rise of blogging and social media such as YouTube.

I still retell the story of McKinsey’s Chief Executive who was side-blinded by the appearance of YouTube back in 2006.

The morning papers appeared on his desk with the headline: Google acquires YouTube for $1.65 billion.

He had never heard of this company and so called in his team and asked the question: “What is YouTube?”

None of them knew.

A truly social bank advisor is the key

This week has been fascinating with lots of discussions about branch versus no branch and financial advisor versus product seller.

I was going to leave it at that, but feel one final blog post worthy of discussion and this is about the role of social media.

We all talk about Facebook and Twitter in the abstract whilst, for most banking people, it's an alien world that is firewalled away from them.

Do banks need branches?

We had a great debate at the Financial Services Club last night, picking up on that perennial debating point: do banks need branches?

In the pro-branch corner were Anthony Thomson, co-founder of Metrobank and Ron Whatford, former Chief Experience Officer with Lloyds Banking Group; in the anti-branch corner were Mark Mullen, CEO of First Direct and Brett King, author of Bank 2.0 and founder of Movenbank.

One banker knows his industry is trashed, and here's his plan

I often present around the depressed state of the banking markets.

Usually, it’s a political and economic overview of the banking system that shows the issues of regulatory change, customer trust and systemic risk.

So I was surprised and amused when a senior vice president of retail banking for one of Europe’s largest banks gave a similar presentation.

It went something like this …

The future of the cash machine

I’ve blogged about the cash machine of the future before, with BBVA coming up with the idea of side-facing screens.

Very nice too.

Five Good Things Banks Are Doing

Someone made the comment that I would not receive any business from the five banks named yesterday with the biggest mistakes, so I thought I would rectify that by picking on five good things that banks are doing.

It’s harder to find, because it is less reported, but there are a number of banks that do really good on-the-ground work.  Here are five examples:

#5: Bank of America’s Technology Leadership

I often use the example of Bank of America when discussing innovation.  The reason is that they took leadership in internet banking a decade ago by committing to the technology early.   This is a case study that I’ve written up in detail, and the core of the case study shows that through analytics BoA realised that share of customer wallet increased massively the more the customer was in control.  That’s what internet and then mobile banking gave the customer and that’s why BoA committed early to roll out internet and mobile banking with security guarantees to assure customers that these technologies were safe and viable.  It’s also why BoA is the #1 US internet and mobile bank.

Active online banking users                        

• 4.7 million, December 2002
• 11 million, July 2004
• 23 million, November 2007
• 30 million, May 2011 (of 65 million users across top 10 US banks)

Active mobile banking users 

• Mobile banking services were introduced in May 2007
• 500,000 November 2007
• 1 million, June 2008
• 6 million, May 2011 (of 30 million users in the USA)

#4: Barclays Innovations

It’s true that banks are lambasted for being slow to change and adopt new ideas, but Barclays has proven to be an exception in recent times.  From extensive use of social media in their card operations to being the first UK bank to launch a P2P mobile payments service, Barclays has shifted the goalposts regularly in UK banking capabilities.  I blogged about this in depth in April, and it shows that banks that innovate do win more business.

#3: Citigroup’s Visions of the Future

Citigroup are regularly rolling out new technology innovations and trialling new ideas.  Their branch of the future concept opened in Japan last year was particularly noteworthy, as was their partnership with Google Wallet which could have been massive, if Google had opened the Wallet on the iPhone and not restricted it to one handset (the Nexus S 4G on Sprint).  The Google-Citi exclusivity has now gone but, nevertheless, Citi make a point that they have been on the innovator’s curve on a regular basis for over 200 years …

… and what this video shows is that without banking and access to trade and project finance, the world would see no progress.  That’s why Citi and other banks are needed to ensure that societies and economies move forward, not backward.

#2: First Direct’s Customer Focus

First Direct appear on this blog and others so often as the UK’s #1 consumer champion bank that it’s almost boring, but the reason is that they truly understand how to deal with remote banking.  Regularly voted the #1 bank by their customers, the reason that First Direct get this is that they began life as a bank without branches and now see themselves as a digital bank with a human approach.  That’s why they don’t script their call centre agents or do things by the book, and it’s why they win.  If you want to know more about the bank, it would do no harm to revisit my 2010 interview with Paul Say, the bank’s head of marketing.

#1: Standard Chartered’s Charitable Work

There are many banks involved in community and charitable work, but one makes a point of it and it is visible in all my dealings with them: Standard Chartered.  I first noticed their work when I bumped into the then CEO Mervyn Davies at an Awards ceremony in 2006. He was wearing those tacky wrist bands and I thought it would be something about “stop bullying”.  Instead it was about "Seeing is Believing", a charity that is helping to bring eyesight back to emerging market citizens who suffer from cataracts or similar eyesight issues.  Mervyn explained that it was a passionate cause for both him and the bank.  In fact, if you look at this charity, which aims to raise $100 million by 2020, it is actually a partnership between the bank and the International Agency for Prevention of Blindness (IAPB).  In other words, the charity would not exist without the bank’s support.   And it goes to the heart of the bank.  For example, Standard Chartered sponsor Liverpool Football Club.  The bank even replaced its sponsor logo in the Liverpool versus Chelsea match last season, to promote the charity’s work.

And it’s not just this work that places them high up in my list of banks doing good things.  For example, I bumped into another senior StanChart banker in Asia six months after meeting Mervyn Davies, Mike DeNoma.  Mike was championing a charitable cause to stop child pornography online.  It is clear from both encounters that the bank actively encourages charitable work as part of its culture and that’s why they get my number one award for doing good things.

So there you go.

Five banks doing good things.

Note, that four out of five of these are the same five banks as yesterday (First Direct are part of HSBC), so it shows that they can just as easily do good work as messing things up. 

Oh, and why did I miss out RBS?

Well, I was going to include RBS but:

1. struggled to think of anything  amazing they’re doing right now as most of it is downsizing; and
2. the government’s thinking about nationalising them anyway.

Either way, they’ve got no budget for consulting with Chris.

Meanwhile, there are many other banks doing amazing things out there, including many of the names that have had reputational hits over the past year.

In particular, if you want to see a few more amazing things banks are doing that are not so big, then go check out Fidor’s Social Work  and Triodos’s Sustainable Stance.