We believe that ‘Life without banking’ is the future. A human centered approach will pivot the customer experience (CX) of financial service providers in the broadest sense and serve all parties for the better!
Please note: This article and it’s materials are published here courtesy of Mirabeau, the company I wrote this article for.
The relationship between the financial industry and people has been under some pressure the last two decades. With the advent of PSD2 and GDPR, customer relationships will change in a way that will affect more than just the financial industry.
Legislation will make banks move to change
With the introduction of this legislation, the financial service market will be opened to other industries like retail, tech and communication. It will also make services and client data more portable and fragmented:
Epitomized by PSD2, open banking lays siege to the banks’ traditional power center: data. Banks will no longer have a monopoly on their treasure trove of customer data — account history that tells the story of life events and transactional data that lays bare the day-to-day minutiae of customersForrester Predictions 2018
The changing data landscape
The customer relationship and data will be more fragmented and transient than ever before. This will affect the financial market for the good or the bad. Because people won’t have 100% loyalty for-, or trust all their data with one bank or financial institute. Financials won’t be able to leverage data as they might have expected a couple of years ago. But there is a silver lining!
As we see it, this disruption in the data landscape triggered by legislation and new players is a perfect excuse to rethink the Customer Experience of financial service providers. It’s also time to involve people in this process and examine patterns of the (to be) competing industries.
Connect with real people’s needs
With a new CX in the financial services market, loyalty will be measured in provided value, seamlessness and how it connects to the life of people. Mind you, we’re not just talking about people’s role of ‘customer’, or ‘client’, but connecting in a real way with their day-to-day needs.
For example: rather than focusing on the transaction between people and companies, banks can play a role in the relationship. Think of an ‘automagic’ concierge-like service for your subscriptions:
If you’re going on holiday, we’ll automatically engage the holiday insurance, stop Netflix and give the kids some holiday allowance to spend on ice cream and other fun activities.
The financial industry can currently be defined by an opaque infrastructure and business model exposed by an awkward service apparatus. People need something else in their lives: seamlessness, a secure future, ease, empowerment, safety as a service, somebody that understands their needs.
Learn from CX champions like Amazon
That personal service of adding ease to your world and interconnecting magic between brands, has been growing since the advent of the Internet, smartphones and now artificial intelligence. It has been a ‘go to’-formula for retailers like Amazon and Bol.com, tech companies like Apple, Google and Facebook, but also content- and communication companies.
Both Amazon and Bol.com have taken the step to invite other brands to use their infrastructure. Those invited brands curiously decided to use Amazon as an additional platform to do business on, with benefits of a base line customer service for both brand and customer.
In a totally different way Apple has claimed the need for security and seamlessness for payments in the name of their customer base. Likewise, Google claimed the field of ‘neutral’ deals finder for travelers, rendering the dynamic pricing engines of airlines and travel agencies near useless.
A long-lasting relationship nowadays means: sustainability over loyalty. So: add ease to connect, create value to sustain and make some personal magic to grow.
Banks can step into an interconnected world
Financial services will not be owner of all financial transactions, nor owner of all that data. Creating a bit of magic in the lives of people means nesting yourself in the dynamic network of brands and services around each individual, family and community. If financials change their services in time, they can play a pivotal role in adding substantial value to everyday life.
People already see all product- and service providers as parties that interlock into their lives, the only thing is: they don’t interlock into each other yet. Banks need to complete their trust circle with more than just banking products and services. Services that are aware of change and other players in the lives of people.
So, I’ll lend money from Amazon. Google will automate my finances. Biometrics will secure my car & wallet. My kids’ houses will be my pension and my finances will be managed across 40+ companies.The Future of Money
Legislation as a CX booster
But this human centered service landscape is still a far cry from current reality. As it is, with the introduction of PSD2 as the important booster, the tech-, retail- and startup industry is going to get the finance cake and eat it too.
Banking as a verb will disappear
Banking as a verb will disappear. Bank services will be invisible. So, what’s left of the bank? A radical change is needed. Not to change the tide, but move with it, catch up and join the human centered CX movement. Financial service providers might want to think about flexible turn-key-products and services that feel like subscriptions, kickstarters and prepaid concepts.
The nature of services will have to change as well. The infrastructure of banks is still valuable, but as a commodity, its invisible. The services on top of that infrastructure will create a valuable relationship with their clients.
To do so, we might also want those services to be more personal. For example: banks won’t offer products like ‘saving accounts’, or ‘payments accounts’, but will be the manager of your solvability as individual, group of friends, family, communities or even company.
Form a network around peoples needs
Banks will need to build services that make people focus on things they hold dear: having fun with their hobbies, friends and family, maintaining a certain level of security for now and in the future. Like Amazon the network of financials will expand to multiple brands around individuals and groups and might even act towards other brands in name of their clients.
Think of managing subscriptions, negotiating payments in name of a group of friends and offer a flexible and smart financial safety net based on day to day behavior and client input.
Preempt smartly, collaborate and learn quickly is the message for financials of now to survive in the future.
Learn to look forward
Utilizing, or tapping into personal data is already identified as a powerful means to be a more predictive financial service. It has however, been tough to win the trust of people to share that information. People’s financial discontent is at a record high and 90% see their financial providers as a purely transactional provider.
This is why the introduction of AI and other advisory financial services have been lagging. Our biggest learning is that most services are proposed as monolithic and ‘unaware’ of other services and brands in the lives of people.
Future of Money study by ReD Associates
Last year, our friends at ReD Associates published one of the most comprehensive anthropological studies on The Future of Money. It describes a clear need to co-create with people to redefine the role of financial service providers and what the industry must do to ensure that digital investments deliver on what customers want.
Human Centered Design in finance
Human Centered Design is one of the most powerful tools our industry wields to create valuable, seamless and personal services. It’s a process, but also a mindset.
Human Centered Design starts with curiosity for people’s needs, behavior and context and thinking holistically. Along the way it relies on regular tests and prototyping to guide the trajectory of the design team. Involving research to learn from people, but most of all talking, moving and living with real, actual, generic and special people will enrich your process and yield provable results, before you even released your products.
As you can tell, we’re a fan :-). Do you want to find out more about our process, our views on how to go about this massive challenge, or how you can make a difference in the lives of people?