The direction of travel in financial services is clear. Consumer super apps and portals for smaller businesses are on the horizon, and technology and data-driven insights will shape the customer journey, but education is required to sustain trust
Rafa Plantier - Head of UK and Ireland, Tink
Matt Hammerstein - Chief executive, Barclays UK
Philip Watson - Global head of the investment lab and chief information officer, Citigroup
Pella Frost - Director of everyday banking products, TSB
Chirag Patel - Executive vice president and global head of digital payments, Santander
What is the current state of personalisation in banking in the UK and around the world?
RP: We are at the dawn of an exciting new age. Until now personalisation was based on a customer’s engagement with their financial institution. Today people and businesses have a bank that genuinely partners with them and can assist with remittances, online payments, pensions, mortgages and more. Now greater personalisation and richer experiences can be driven by all those data insights.
MH: For personalisation in banking to work, trust is essential. Whether £5 or £5 million, if you’re going to give your money to somebody else to protect it, you have to trust that they have your best interests at heart. We are seeing an interesting trend with younger people, where they rely on technology and expect instant gratification, but also they are self-aware that the way they pay for things doesn’t give them a sense of control. They can wave their phone in front of a terminal or touch a button on their smartphone and suddenly the money disappears. For them, part of the personalisation is digital notification, at the very least.
PF: Personalisation is a lot about having control. Customers want to have confidence with their money. We saw considerable shifts in consumer behaviour during the pandemic around payments and digital and app-based banking.
PW: The pace of change is accelerating and, to increase personalisation in banking, education is vital. We help Citi clients understand unstoppable trends: artificial intelligence, cloud, internet of things and more. These multi-year, secular long-term trends create tremendous opportunities. However, they also require us, as an industry, to inform and share with our clients how they and parts of the community, including the unbanked and underbanked, can derive benefits.
CP: There are a lot of pitfalls with the personalisation trajectory that everyone’s on. Because a bank’s traditional customer base goes from 18 to 80 year olds, broadly, there is a tendency to load up a banking app with as many features as possible. But depending on their age, customers will want different experiences. Be obsessed with improving your customers’ experiences, but keep it simple, is my advice.
How are technology and data-driven insights delivering better services for banking customers?
RP: The combination of technology and open banking provides a fantastic opportunity for the industry to innovate and create sophisticated digital products that would previously not have been available to customers walking into a branch, while also running fraud out of the market. A lot of complex mapping is possible now, bridging a journey from high-end, white-gloved corporate finance products, so they are available, as microservices, to anyone with a smartphone.
PF: As an example, at TSB, we have recently trialled a product created in partnership with ApTap that suggests to customers ways they could be saving money. We have found that customers can save hundreds of pounds in minutes by switching broadband providers, for instance. It’s a no-brainer to help our customers use their data to drive insight and get a sweeter deal.
MH: For a long time, the banking industry used technology poorly. There was a centralised system that disempowered local teams who needed to support customers. Decisions and authority were taken out of their hands by tech. Now, with technological advances and the availability of data, the situation is totally different. Local teams are re-empowered and better informed, and therefore make better decisions. But the big and important issue that sits across everything we’ve talked about is people feeling like they have the ability to not just have the technology available, but know how to use it effectively.
CP: Open banking is built on the premise that banks have to open up the customer data to anyone and everyone, but then the data and experiences the customer uses with fintechs are closed to the banks. That doesn’t make sense to me. Everybody should have access to that data to create a thriving, innovative environment.
What does the future of banking look and feel like for customers?
PF: There is a cultural shift happening in financial institutions about how we think about our products, our services, our customers. There’s a real growth in curiosity when we think about our customers’ lives, what they’re trying to achieve, the data our customers share with us and what we can observe from that to help them manage their money better.
RP: I think we’re going to see more financial institutions investing in creating their path towards building their own ecosystems, becoming “super apps”. And I would bet a lot of that will be achieved through partnerships.
CP: Partnership is about complementing the skills and capabilities you have. When you have found that customer painpoint, it’s not necessarily the latest technology that solves it. Often banks can get a much faster path to market by partnering, rather than building in-house. This approach allows you to do something with more incredible speed, with lower costs, potentially, and it enables you to test and see if these are the right solutions quicker. It’s essential to get it in front of the customers and see if it works or not.
PW: Partnership addresses our collective challenges that are too big for any one of us to handle. At Citi Ventures, for example, we partner with leading companies with cutting-edge solutions to explore, incubate and co-create solutions to best support clients. By working backwards and thinking about the roles we all play, we can encourage wide-ranging collaboration and deliver a more equitable and sustainable society.
MH: There’s still a lot to do in terms of supporting individuals, as lots of people still rely on cash to help manage their lives. Solving this is a social issue because we can’t leave people who are reliant on cash behind, so we all have an interest in playing a part on cash access. When it comes to small businesses, I do think the next wave on working with banks is already building. Small-business owners want to spend their time running their business, not doing banking. Finding ways to take the effort and the admin out of their banking is critical to helping them, and you can find a way to bring all that together in particular through partnerships.
For more information, please visit tink.com