Drum Network asks what advancements in tech will change the way we bank, and how can banks win our trust through tech?
David Skerrett, managing partner, Nimbletank
The busiest UK bank branch is now an app. It is secure, has less queueing and is with you wherever you are. I can see that the open banking API initiative, voice authentication and blockchain will change the UK banking landscape in terms of data flow, biometric log-in and currency respectively. Yet, the biggest shake-up is going to be in peer-to-peer payments via messaging apps. At the moment, a user generally has to go through nine steps to send money electronically to a friend. Open up their banking app, login, wait for authentication, navigate to send money, enter payee information, my account, amount, submit, confirm. Each step has a one or more second wait, whereas using a messaging app such Facebook Messenger you can just type ‘Send David Skerrett £100’ and it will look up the person, help make you sure you are sure, securely authenticate and process. With the winning brands in banking now predicated on utility and saving you time, this evolution in behaviour is sure to transform how we bank, so long as it is secure and easy to use.
Rick Lamb, head of operations, Latitude Group
The pace of tech change within banking is always going to be hampered by people and businesses working in formats that are a drag on progress. Innovations to deal with cheques on smartphones are ultimately lost on the generation who still use cheques. Similarly, current campaigns around better voice recognition for telephone banking often miss the mark in the face of clunky security devices getting in the way of online self-service which would reduce the need for call centres in the long run. Having said that, making security seamlessly personal (as in the voice recognition example) is the other way forward. Integrating your banking app with voice recognition security and voice search could lead to a great experience: ‘Siri, have my expenses been paid yet?’ Imagine getting a reliable ‘yes’ or ‘no’ instantaneously, without having to fiddle with a tiny calculator and umpteen passwords.
Emma Critchley, PR and marketing manager, TLC Marketing UK
Multiple factors, including open banking, have caused banks to embrace new technology. The volume of internet connected devices will provide banks and consumers with more accurate data for decision making and provide customers with an opportunity to bank without the need of stepping into a branch. Virtual reality, for instance, can make branch visits a virtual experience, and if a branch visit is required then staff could be replaced by robots. Biometric technology will spell the end of passwords and pin numbers, while wearable devices will make carrying cards a thing of the past. The advancement of big data analytics underpinned by AI will make our consumer banking services more personable than ever before.
David Jolly, account manager, Else London
There's an opportunity to establish a best in class experience for a secure, non-screen based interface. The Amazon Dot and Echo were among the most gifted items for Christmas 2016. There is a tremendous opportunity for banks to be able to respond to voice commands: “Alexa, have I paid the gas/credit card bill?” or better, “... can I buy that TV?” Capital One has enabled voice activated skills for users to access their bank accounts through this fledgling capability, albeit in a limited capacity. Banks should embrace these technologies and establish habits among their user base. They should be mindful that, once hooked, people experiment and it will need to be able to cater to their ad hoc requirements. One missed step and people will s top using it.
Matt Webster, co-founder and director, Media Bounty
Just as Accenture’s acquisition of Karmarama last year confirmed the merging of marketing, digital and IT, I think that this year the coming together of many different key financial products will confirm to us the merging of our money and health insurance into ‘life admin’. The traditional way we look at banks – bricks and mortar physical buildings that have vaults – is already changing. Transferwise has already turned the world of money wiring upside down. For the big high street banks to remain relevant to a large chunk of their customers, they’re going to have to react and update. I think there’s space to provide a voice activated branded hub that houses multiple ‘life admin’ product providers in one secure place. Open API’s plugins required for the back end may sound nuts for a bank, but if it ultimately helps customer UX that’s a good thing for everyone.
Chris Philpot, head of technical SEO, RocketMill
In my view, the humble bank card represents the greatest vulnerability in modern money management. The first change will be to the CVC (the so-called security code on your credit card which never changes). Savvy web users are already using two-factor authentication to secure their online accounts. This will extend to banking, with one-time security codes delivered to our smartphones each time we make a transaction. In five years’ time, near-field communication will be essential to our financial lives. We will withdraw money using our smart devices on contactless ATMs. The same tech will reach our living rooms, as we make e-commerce purchases by tapping an NFC pad on the tabletop. A generation of confident digital consumers will be happy to spend five-figure sums online without typing a solitary digit.
John Markham, UK chief technology officer, Rapp
The pace of technological innovation is fuelling consumer demand for convenience, none more so in the banking sector. Entering a four digit pin
is now regarded as slow and inconvenient, fostering the growth of new and trusted ways to verify identity. Fingerprint technology as a means of verification is well established, but it’s at risk of becoming old-school as voice and facial recognition matures – take Amazon’s plans to enable ‘pay by selfie’ as an example. Additionally, there is a major shift in banks adopting new blockchain technologies to make the process of transferring money both faster and more traceable, as well as the increased pressure by the finance technology eco-systems from Google and Facebook. However, I think one of the most interesting developments will be the emergence of AI and how that changes the interaction between banks and consumers. Trust is critical as to whether these technologies will have a profound impact within the sector and if banks want to keep up with consumer trends and demands, it will be a key area of focus and investment going forward.
Andry Ratovondrahona, principle interaction designer, Else London
Banks have always been behind the technological curve due to their risk averse nature. If we were to predict where they’ll be heading next, we only need to look at today’s emerging trends in technology. Recently, big data, artificial intelligence and machine learning have emerged as the ‘next thing(s)’ that will eventually make their way in today’s banking systems. By developing systems that can be trained and make use of big data, banks could potentially become better at discovering patterns. This will have an immense impact on how their customers are being serviced. From being able to fix things before they break to redefining how risk is being assessed, this new wave of advancements can have a direct effect on mortgage lending, strategy selection for investments and more importantly, system failure prevention. All these technologies will have an invisible yet profound effect on B2C relationships – the same as trust.
Johannes Smith, chief executive officer, Hugo & Cat
After the damaging events of the last few years, banks in 2017 still have an issue with customers trusting them. Trust is about demonstrating an understanding of need and that understanding comes from experience. It can’t be about ‘us’ (the bank), it has to be about ‘you’ (the customer). Big banks need to use the data and knowledge they have accumulated about their customers to create relevant, tailored, digital products and services that target specific life scenarios – whether it’s banking for kids, managing bills in a flat share, saving for a deposit or planning for a wedding. That way they will build trust by being exactly what customers need them to be and at the right time, rather than just being faceless catchall portals.
Freddie Baveystock, senior strategy director, Futurebrand London
Trust and tech are the two thorniest issues for the traditional banks, not typically discussed at the same meetings. However, they should be, as they add up to relevance. Few things drive trust better than personal service, so banks need to create a connected experience that leverages their investment in both people and technology. Lloyds Banking Group and RBS have terrific people, but the more they transition customers to self-serve digital channels, the less relevant their human capital is, and the more vulnerable their businesses become to the new breed of digital challengers. Barclays Digital Eagles is an ingenious response to this quandary, but it is primarily a brand and communications play rather than a genuine reengineering of the customer experience. Big banks should be able to offer customers the best of both worlds, for example, digital services powered equally by automated data analysis (performed at scale) and human expertise (delivered on an individual basis). This would deliver the bigger win, which is relevance.
Alex Edwards, UX designer, RocketMill
A high standard of UX through mobile apps will change the way we bank. Users are looking to monitor spending while on the go in the ever-growing mobile market. Developments of platforms such as monzo.com and improvements in mobile interfaces, such as Nationwide’s recent banking app face-lift, make this want more realistic. With people switching banks on average every 15 years, attracting an audience through usability could be a great way to attract new customers with benefits for all. By giving users the ability to categorise spending and monitor cash flow, banks can show transparency and ease-of-use that creates returning, loyal customers. Through making day-to-day spending an ongoing conversation rather than a daunting one-off meeting, customers build a long-term relationship. Building further trust through built-in mobile security systems, such as fingerprint recognition and even voice control, will amplify this to help the truly trustworthy and secure tech standout.
Michael Keegan, senior technologist, Rothco
The sands have shifted and banks can no longer take customer loyalty for granted. They aren’t just competing with each other any more – they’re battling to stay relevant in the face of an onslaught from tech startups. Technology empowers consumers. It offers convenience allied with control. If a consumer can’t find those qualities in their financial service provider then they will look elsewhere. The proliferation of money transfer, FX and budgeting apps is testament to this. There’s a big job to be done regaining customers’ trust in the face of the hits the banking sector has taken in the last decade. Trust is built on transparency; to build it, banks need to listen to their customers’ needs and understand their behaviour. They need to think like startups leveraging service design and data analytics to create meaningful experiences.
Phil Rainey, creative director, Cuckoo
Trust will be big on the digital agenda for banks this year. With further enhancements in biometric and voice recognition on the way, alongside the big data they have on our consumer behaviour, it will be interesting to see how they use these to gain our confidence. We have a naturally sceptical view of financial institutions. Bridging this gap will be the biggest challenge. Paypal has done this successfully with branding and services that complement finance, social and lifestyle in one. Once the banks get this balance right we’ll engage with new technology more, and in-turn we’ll expect more conversations and conversions within our social feeds.
This article was originally published in The Drum Network Does Financial Services supplement.