Once upon a time, you would have been proud to be a Clydesdale Bank-man or a TSB-woman. You would have had a relationship with your bank, you knew the tellers, the back office staff, the manager… you probably saw them down the pub, they probably went to school with your aunt. Banking was local, personal and identifiable.
Fast forward 40 years and you have a wallet with cards from 5 different organisations, you have them linked to digital wallets, payments technology and eCommerce accounts. You have money management apps, a pension consolidation app, insurance that changes hands every year and accounting software that you upload your receipts too.
You do more banking than ever before. You borrow, spend and repay more than ever before. But do you do it with a single, local, identifiable point of contact? no.
So do people really need banks? Or just banking?
Long gone are the days described above. You may insure through Aviva, bank with Santander, save with Atom Bank, borrow from Sainsbury’s Bank and plan for retirement with Royal London… and you can bet your bottom dollar, there is someone else down the street who has the same providers but for a different product set.
So is it still a battle for hearts and minds? Does brand and reputation equal lifetime value? Well, maybe.
There is a distinct generational split at play here, where olders consumers have a smaller provider set and younger consumers a broader set. But what is clear across both is that the primary source of ‘customer experience’ is mobile, digital platforms, which means that your brand is established more via your platform’s flexibility and usefulness than it is established in your TV ads… which is a different game being played by different rules.
If brand affinity with the RBS disappears when that organisation is renamed NatWest and if your affinity for a bank diminishes when it closes the brick and mortar in your town, well then it’s already become a battle for smartphone real estate and frictionless digital journeys.
If the challenge for banks wasn’t customer-centric before. It is now.
Banking is about clear and easy functional experiences via platforms and applications on the devices that we are habituated to.
So, if you aren’t building platforms yourself, you should be partnering with your consumer’s preferred platforms to make things as seamless and as simple as possible, because one thing is for sure… they’ll go where their banking experience is at it’s best.
Building walled gardens and fearing competitors is our default state in business. But in IT and software development, the open source ideology has been a rising tide that has helped lift all boats.
The traditional banking culture needs a reset and has definitely started to address this, both because of changes in the regulatory environment and because of the afore-mentioned behaviours and motivations of its consumer base.
Whether it is Apple and Goldman Sachs, or HSBC and Bud, there is real value (and shared risk mitigation) in building solutions across organisations. Especially when you know that the likes of Amazon will want to white label financial products that it can leverage to its user base without applying for a banking license.
When people think about open banking, they tend to think about the opportunities for aggregation, however, that is arguably one of the least exciting or disruptive use cases.
There are a fascinating range of Fintechs with read, write, transact, create and fulfil APIs, alongside big organisations like BBVA, who have europe-wide API marketplace. This means that anything that an end-point customer could possibly want to do with their finances is now available via API, which means that there should soon be a wide range of data-empowered personal financial management tools and platforms that at one point would have been thought impossible… available to all retail consumers.
Waracle have a wealth of experience building innovations with impact in the financial services industry. We deliver purposeful work in collaboration with our visionary clients. If you have an open banking feature set or application that you’d like to discuss with us. Get in touch with our team today.