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The Future Bank: Augmented, Social and Mobile

We had a great discussion at the Financial Services Club Central & Eastern Europe (FSClub CEE) this week. 


Now in its fourth year of operation, the Club meets regularly at the residence of the British Ambassador in Vienna, Austria (see postnote if you want a laugh). 

The theme of the meeting was: “the future of retail banking”, with panellists including:

  • Oyvind Oanes, Chief Marketing Officer of Zuno Bank, a Raiffeisen Bank International Company;
  • József Nyíri, Founder and Chief Innovator IND Group;
  • Chris Skinner, you know who; and

Moderated by Thomas Labenbacher, VP Payment Services CEE, Raiffeisen Bank International and Co-Chair of the Financial Services Club CEE.

FSClub pic3

As the discussions progressed, we covered all of my usual favourite subjects from fidor bank in Germany to Movenbank in America.

I won’t bore you with those details here as, if you read my blog, you will know all these case studies, but there were a few points that made me think.

First, there were several references to Direct Banking versus Branch Banking.

I do not see this is as an either – or discussion, but a choice. Customers will choose the banking they like and want. Some want branch banking, some want direct, and some want both.  This is why you cannot generalise and need to design your bank for the customer’s choice, rather than for yours.  If you want the customer whose psychographic profile is demanding face-to-face contact, you must have branches.  If their profile is that they want to self-manage and self-serve, the direct bank approach works.

It’s a question of lifestyle choices.

Second, a similar debate started about Traditional Banks versus New Banks.

This is a debate I have quite often here too …

and the key is that traditional banks were built upon branch-based models whereas new banks do not need to be.  As this occurred to me, it made me really challenge why anyone would launch a branch-based bank today when that is where all the traditional banks reside.  If you are designing for the lifestyle choice, surely you would design a direct or remote bank approach, as that is far easier to differentiate and to find the customer segment for the new bank generation.

Fsclub pic2

Third, we had quite a discussion about channels.

Now I’m trying to get a new discussion going about augmented banking.  Augmented banking does not recognise channels, and any mention of multichannel strategies is outlawed in the augmented bank.  What augmented banking focuses upon is the customer lifestyle, how they choose to relate to and communicate with their financial provider, and delivering augmented digital servicing as part of their day-to-day living.

This is proactive fulfilment at the point of life, rather than reactive services at the point of interaction.

Proactive fulfilment is all about recognising customer activity through opt-in services, and enriching a person’s or corporate’s day-to-day financial needs as they arise.

This is what we get today from Amazon and Apple. I don’t need to fill in multiple forms to order that book or song, just clicktopay or confirm.

But proactive fulfilment in the augmented bank will go far further than this.  It will recognise my movements through GSM tracking and provide me with alerts and offers as I live my daily life.

The augmented bank will recognise that I looked at a new LCD TV on Google last night for $499 and, as I walk past the electronics store, will offer me a QR-coded coupon to buy that TV now for $449 at a saving of 50 bucks.

The augmented bank is already here – just look at Google Wallet and Apple Passport – and it is not a bank.  It is a bank-like service that leverages data at the front end and financial transaction processing at the back end.

The augmented bank goes further than proactive fulfilment, as it can actively seek to direct customer behaviour through rewards.  Buy your goods with this retail store, and we will automatically give you an extra 5% discount if you use our bank to pay as they are our bank’s loyalty program sharing partner.  Save more than 10% of your earnings per month and we will give you a “Saver King” or “Saver Queen” badge to share with all your friends on Facebook.

These latter examples of service are what Movenbank promises to deliver, and I can see many other examples emerging of the augmented bank.

This will be one of the more important developments over the next five years.

Finally, I was challenged about social media and how this is relevant to customers.

Why would a customer want their bank intruding on their social life?

Wrong, a bank should not INTRUDE on anyone’s social life, but it can INCLUDE their capabilities in their social network.

The question for most banks is: How?

That’s been a tough decision, but there are a number of examples emerging with American Express at the helm.

I blogged recently about AMEX’s social media journey, and the critical change came about when they stumbled over a social media campaigning that blossomed out of their control.

This was when they encouraged Americans to support their local Mom and Pop stores on facebook.  Suddenly, hundreds of thousands of facebookers were Like-ing their campaign and the guys in charge of marketing at AMEX thought: hey, this is good.

Of course it is: it’s free marketing!

Having dipped their toe in the water, AMEX now dedicate a lot of effort to social media activities from loyalty coupons via twitter retweets to active promotions on facebook.

My favourite statistic from all this activity is that AMEX now have over almost 2.5 million Likes on their facebook page (UK banks have far more Dislikes).

That’s 2,488,457 fans of AMEX who regularly talk about AMEX in their status updates.

For example, at any given moment there are thousands of conversations taking place about things on the AMEX facebook page.

Take this picture taken at 10:40 GMT today …


There are just under 8,000 people talking about AMEX.

This may not seem like anything important or worthwhile to you, but it’s fundamental to AMEX as, with the average facebook user connecting with 235 friends, it means there are over almost two million people seeing news about AMEX services through their friends updates … no marketing involved, just peer group influence.

This is the best form of advertising influence ever achieved … and it’s free!

In conclusion, some banks get the new world – Wells Fargo is one and fidor bank is another.   Some banks do not.

The banks that get the new world of social connectivity realise that it is the cheapest and most influential way to get more business: my friends are telling me to sign up for this, so I will.

The banks that do not get it are subject to the most poisonous and severe critique ever.

This is the most fundamental reason why banking needs to get on the train for the new world of banking, as the train has left the station.



Vienna is a beautiful city and a beautiful location, although the Ambassador’s staff made me laugh when they said that most locals asked what these strange banners were that were hung outside the Embassy.


Of course, they are for the London 2012 Olympic Games but, as only sponsors can place the Olympic logo on their posters, Britain cannot … strange but true, and the reason why all the Austrians have no idea what it is we are advertising.



About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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