If we were creating a bank today, how would we create it?
This is a question that comes up regularly and I haven’t tried to answer it for a while, but thought I’d give it a go this week, as it’s timely.
The reason it’s timely is that the last time I asked such a question, the focus got into an IP-based bank, where everything would be built upon Internet-Protocol rather than bricks and mortar.
I would still take that approach today, and still believe that a bank would focus upon what IP can do for them, but would go further as mobile IP is the focal point today, along with apps.
Now, let’s be clear, building a bank today requires many things and so the first thing I’d start with is what sort of feeling I want my bank to convey.
Are we a technobank or a human bank?
Do we want to encourage human interactivity or remote interactivity?
How do we believe we are different and what can we deliver to clients to show we are different?
Where are the weak points in the current bank offer, and how do we exploit those?
And so on and so forth.
These questions cannot be answered with a simple yay or nay, but need to be pondered individually so that they are not imponderables.
So my first point of focus would have to be how to deliver something the current banks do not.
And what is that?
Current banks deliver secure deposit taking, transaction processing, branch access, an ATM network, facilities for loans, credit and mortgages, and more.
They deliver such capabilities primarily through branches, with call centre and mobile internet as an adjunct.
The only banks that differ from this are the online only and banks without branches like First Direct.
But these banks are owned by traditional branch-based banks, and use the parent’s capabilities to offer the branch and ATM services they themselves lack.
So, if I were opening a new bank, the first thing I would focus upon is opening a bank without branches whilst doing a deal to get access to the ATM network, which is easy in the UK thanks to Link, now Vocalink.
The second thing I would think about is how to create a bank that was cool.
Vernon Hill, the founder of Metro Bank UK and Commerce Bank USA, recently presented to the FSClub and said that Metro Bank are often referred to as the Apple of banking … I beg to disagree a little.
Metro Bank is a great new innovative bank for Britain, but their model is based upon branch-based banking.
Their branches are good, but not cool like Apple.
So if we wanted to create a new bank for Britain that was cool like Apple, I would start with an amazing online user experience designed for mobile and tablet computers.
A snazzy app store financial offer.
Now we’ve had some of those already, like Mobank, but they are not mainstream and not designed for core banking.
Most new apps for banking from new entrants have purely been to dance around the edges of deposit taking but not to go for the core.
Now if I designed an IP-based bank with mobile net focus at its heart, what would that mean for the deposit taking area?
It would be a challenge, as a cool Apple-store style app bank would be too weird and funky for some.
So it would need some gravitas somehow.
Does that mean investing in branches?
As mentioned, Britain’s best loved banks today – Smile, Cahoot and First Direct – are banks without branches, so branches are irrelevant in launching a cool new bank.
What’s key to a cool new bank is to be 21st century and heavily into mobile, social and online.
So my first tenet of my new bank is to launch an IP-mobile differentiated brand that is cool.
What does cool mean in banking?
Offering apps that are PFM – Personal Financial Management – capable and making them simple to use online and on mobile.
Making it securely cool by authenticating me using my geolocation and signal.
Making it simply cool by never asking me for names, account numbers and passwords, but simply giving me a personal space where my voice activates the services.
Making is way cool by offering me gifts and goods for loyalty, such as flights and iTunes based upon account usage.
And making it cool by relating to me based upon how I want to relate to you … talking to me as a human when I call you and making me feel you really understand me because you’ve understood my data.
Then, to give it gravitas, I would invest in one helluva marketing campaign – both viral and mainstream – with a character or characters who everyone would find believable.
Someone they could trust.
Someone who is not easily bought but needs to be impressed.
Someone like the UK's leading consumer financial expert, Martin Lewis, who I would convince of our cause.
Having a leading advisor on board in our advertising would be a coup, and it would only be an endorsement Martin would give if he really believed we were different and better.
With that as my start point – a cool Apple style bank offer that is mobile IP app-centric and celebrity endorsed by a trustworthy figure – I would then move to thinking about how to organise the bank and our cultural approach.
I’ll carry this theme through the next few days and would be interested in any perspectives or critique …