Creating a Valuable Online Banking Experience for Consumers

Financial brands must develop balance innovation, security, and human relationships.

For those who don’t work in the tech industry, there’s a simple truism: technology should be an enabler to a better outcome, not the outcome in itself.

Similarly for most banking customers, an evolution in service delivery, especially a technology-enabled one, should deliver a better service first and if it subsequently has a positive impact on the financial performance of the institution, all well and good.

Unfortunately, many consumers perceive that banks are motivated to to innovate primarily because of profit maximisation. The head of National Australia Bank, Cameron Clyne, said it succinctly last year, “There are issues where many people think the banks can be bastards”. He went on to say that the banks only have themselves to blame for losing the trust of the community.

There are obviously a multitude of reasons why this sentiment exists and it is hard to imagine that it is directly related to the development of alternative channels. Over the last two decades, we have seen a rush to develop remote banking services. Whether it is the now ubiquitous ATMs, retail point-of-sale (POS) systems, or more recently Web and mobile banking services, all of which theoretically provide better service to the consumer. But at the same time we have seen consumer confidence in banking brands fall at an alarming rate. So where is the disconnect?

The evolution of customer service is not as simple as providing more services or migrating service delivery onto the Web. While adept consumers have long since migrated online and are enthusiastically embracing mobile services, at the other end of the spectrum there are still a significant number of consumers who approach this innovation more tentatively. However, irrespective of which end of the adoption curve consumers sit there are two critical elements that banks need to deliver to their customers:

1. Reliability

2. Perceived value

Reliability

As DBS showed us recently when its online banking service went down for an extended period, an unreliable service can create a huge public backlash.

The key lesson from this is while consumers value convenience and ubiquity, reliability, and security of service are also key concerns. The integrity of the system is critical – and an innovation that fails can have a tremendously negative impact on the brand.

Perceived Value

To this end there are some interesting examples of innovation in the financial sector that is customer centric. The explosion of the micro-payments industry across the sub-continent has been truly liberating for some of the poorest people in the region. By delivering genuine value to these customers, a sector has been created where there was previously thought to be no business opportunity.

But the one I am watching with the most interest is BankSimple. Whilst still in start-up mode, BankSimple seems to promise an optimum combination of service innovation, powered by technology, delivered with an extremely customer centric approach.

BankSimple is not a bank, but rather uses existing banks to provide the financial infrastructure upon which their platform sits. The beauty is in the simplicity of the offering, one account, one debit card with a single branded experience. Sure the credit, savings, and checking accounts still exist, but this sits behind a single log-in.

However the killer app for BankSimple is the predictive money management technology that not only promises to automatically move funds between the various accounts as needed, reducing unnecessary interest charges, but it also can move funds not needed for immediate expenditure to higher interest bearing accounts. And BankSimple supposedly will do all this without charging fees.

In the near future, it is likely consumers will continue to diversify their banking activities across a multitude of channels, and as a result, financial brands need to develop a sophisticated and evolving balance between innovation, security, and human relationships. Tech innovation continues to play a hugely significant role in the development of financial services, but where there was previously a drive to cost reduction, leading financial services brands should now concentrate on delivering exponential consumer value. Who knows, if they deliver this, their customers might stop thinking that they are bastards!

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