Why relationships, not platforms, will define the new breed of successful bank
There are quite literally thousands of articles doing the rounds that describe a “technology-led revolution” of traditional financial services. Almost every startup bank, fintech company, design agency or technology provider has affirmed with great confidence that the new banking landscape will lead to the rapid demise of the traditional bank.
This may be true; it is actually pretty difficult to say. Open banking initiatives will open the door to a number of brands we’ve never heard of, and probably some we have but in a completely different capacity. Many of these brands will have the flexibility and the personality to launch highly compelling interfaces, some of which at best might erode the impressive level of digital engagement that banks have today, or at worst could significantly improve switching volumes to shake up the industry.
With so many solutions in market today, some of which it would appear are actually still looking for a problem to solve, it is hard to know if and when to place any big bets. At EY-Seren, our belief has always been that if you start with the behaviours and needs of customers, you can let technology fulfil its fundamental role – to provide better customer experiences.
For all of the “sandboxes”, platforms and proof of concepts that are being clamoured over in various corners of London today, we believe that there is an easier place to start when defining a reference for what the future may look like – the past.
The cornerstone of the high street
In the face of hundreds of branch closures, thousands of associated redundancies and an unprecedentedly low volume of branch visits for most banks, the high street may seem like an odd place to look for innovative value.
It may seem a distant memory or even have been before the time of many of the authors of these fatalist accounts on the future of banking (including this one), but the bank’s role on the high street and in the community has always been so important. The bank was the cornerstone of the Great British high street – the centre of communities, the realiser of financial dreams, the local presence.
In amongst all of the M&A activities, demutualisation, technology advancements in the payments landscape and changing role of cash within the world, the role of the branch manager has been diminished. Many banks that we know to exist today are relatively faceless, huge organisations – the types of organisation that have such complicated responsibilities on a daily basis that, historically, whether or not they were perceived to be likeable or innovative wasn’t that high on the agenda.
In recent years, we have seen a change in approach. Bankers’ bonuses linked directly to customer satisfaction (specifically Net Promoter Score), entire suites of offices dedicated to customer innovation and a new breed of functional brand building activities. Some banks have even up-weighted the importance of being “local” within marketing communications, whilst running a lean branch network, which by definition can’t be local to everyone.
Our own research into the role of the branch, particularly within remote areas, shows that there is still a significant emotional attachment to branches and the helpful colleagues they house. But, with interest rates as low as they are and increasing scrutiny on overdraft fees, traditional sources of revenue for retail banks will be under pressure now and in the future. Sadly, looking at the volumes and types of interactions across the different channels of the bank, the branch network is a logical place to start rationalising. Not good news for staunch supporters of face-to-face banking.
So what is the solution? How can we give the customers that need it the reassurance, contact, intimacy and peace of mind of the branch, but through a lower cost channel? Technology obviously, but how?
Principled by principle
There are so many possible definitions of ‘good’ customer experience. Consistent within each of these definitions are two key overlapping elements:
- Good customer experiences by their nature are hard to describe in general terms
- All of the attributes you would associate with a good relationship of any kind work in a customer experience context too – trust, intimacy, reliability, tolerance, flexibility, shared values, selflessness, value exchange… to name a few attributes we commonly see in our research with customers
Funnily enough, many of the same attributes could be used to describe the much-loved bank manager. The bank manager who is always aware of his customer’s goals, circumstances and needs, discreet but known to most, empowered to make decisions (on some things), knowledgeable on their topic and a consistent, reliable presence in the centre of a community… good ones anyway.
So how do we take all of the attributes of the branch manager and carry them forward within a technology-led customer landscape? The natural inclination of most is to map out what they do and how they do it and then digitise these activities. Paying in a cheque, getting advice on how to save, even applying for a mortgage are all processes that are achievable digitally – made possible by a similar process of mapping solutions to needs.
What such an approach rarely achieves is capturing the essence of the experience as an important input. All of the things that make the experience great, not necessarily the service.
The art and science of taking the essence of a non-digital experience and translating it into an interface is one that has been around for quite a long time. So too the tools and techniques to achieve this. There is still a lot of debate on who owns this part of the converging landscape, both from an internal organisational perspective and a supplier roster perspective.
At EY-Seren, we use “Experience Principles” to capture the personality and service style of a brand within digital design. Experience principles for us consider a number of attributes, some tangible, some not – using research to define the identity of the experience, and the principles for recreating it.
If the branch manager was an interface
Our advice for anyone tasked with defining the bank experience of the future is this – think about all of the attributes of the bank manager and try to work with those as principles. In an industry dogged with trust issues, regulatory reform and general bad feeling, taking a few steps back to look at the origin of relationship banking can really help to shape the future digital experience.
From our own research across a range of brands, we have captured some of these principles to work against:
- Personal: know customers without the need for more information, aware of their life context and how they want to be treated
- Present: available to interact with whenever a customer needs you, wherever they are
- Expert: always able to explain why things work as they do, without using jargon
- Simple: easy to engage. A name and a face whenever one is needed
- Secure: offer peace of mind at all stages – money is important and hard-earned
- Honest: transparent about the way your services work, how customer data is used, and not afraid to apologise or explain
Clearly all of these principles should be brand and company specific, but by going through a similar exercise of capturing the human attributes of a good banking relationship, we can start to create the types of interactions that deepen relationships and promote trust. These principles should inform everything from interface design and tone of voice to features and functionality.
After all, if there is going to be a banking revolution, it is going to be whoever uses technology to improve, not replace, individual relationships with customers who wins.