Banks designed for humans by geeks

I was going to move away from further debate about branch
and omnichannel today, as there’s far more interesting stuff about Google
giving payments away for free with Gmail and PayPal doing the same with mobile,
but that will have to wait until next week as yesterday’s post created quite a stir.

I guess it was the mention of Apple (whose glossy rosy tint
has reduced of late).

Or maybe it is that core message about designing for humans
rather than money.

In fact, I did toy with the idea of Banks designed for humans, not geeks as a title, as the
techno crowd fall into the same fervent misnomer as the branch crowd.

Equally, most get this wrong because they built their
operations for one point of emphasis – branch, call centre, internet – and now
are struggling because no longer do we deal with channels,
we deal with a human at their point of need or want or desire or thought.

This is what the data geeks are really drilling down for: to
get to the customer 24*7 as they have financial needs, wants, desires and
thoughts, and that is why today's title is Banks designed for humans by geeks. 

Now that sounds a bit creepy - not the geek thing, but the deep data drilling - and it could be creepy, but you have to remember that this is
all performed on a permissions basis (as I’ve blogged before).

The idea would be that you could track a customer’s
mobile digital footprint in real-time and, using geolocation, deliver proactive
offers to customers at their point of context.

Take a case in point.

I’m looking for a house.

First, I do some searches online. The bank does not know about
these searches but Google does and tips off the bank, on a permissions opt-in
basis of course (don’t be evil), to let them know that Chris Skinner is house
hunting.

By coincidence I get an email offering a great mortgage deal
but I’m not that serious yet, so I just ignore it.

Then I’m in a real estate agent and talking about the house
move.

They show me some houses, but I’m not sure I can afford them
so I bring up the bank app and look at how much a month I would be applying on
a higher loan-to-value mortgage and whether I could get one.

Of course, the app lets me do the calculations and, just as
I’m closing the app, it gives me a reminder that the bank has that great mortgage
deal waiting for me if I want it.

I don’t.  Yet.

So I find the house I want, and am now getting serious.  Time to look for a mortgage.

Of course, I’m not going to take the bank’s offer, and so I
search on a comparison site to see what the best mortgage deals are that are on
offer right now.

I find a competitor’s rate is better and start to fill in their
application form online.

Now here’s where it gets creepy and maybe interesting.

Before I progress my application with the competitor, my
phone gets a text message.

It’s 10:30 at night. 
Who’s texting?

It’s Nitin, my bank relationship manager.

The text says: “Hi Chris, Nitin here from D-Bank.   Can we talk about a mortgage tomorrow morning?
We’ll give you a better deal.”

Sure, I think.  Let’s
wait till tomorrow.

Nitin calls me at 9:30 the following morning and tells me
about the deal he can do. 

It’s good.

0.1% interest rate lower than the best rate I could find
online, and a longer term.

I ask him why the bank didn’t offer me that rate upfront as
I thought that was the bank’s best rate.

It was he tells me, but they want to keep me as a customer
and recognise my loyalty.

(It’s actually in
order to cross-sell me all the other stuff that makes up for the 0.1% loss of
margin, but I don’t know that as a general rose-tinted customer)

So I arrange to meet Nitin to sign the forms – yea, yea,
under FCA guidance all mortgage applications must be signed in person before they
are approved, it’s the rules y’know – and by happening into the branch I
suddenly realise how much more the bank can do for me.

First, I’m amazed by the cappuccino they serve me, and then
I’m amazed at how lovely the branch feels …

Photo of Umpqua Bank’s
flagship store courtesy of Banktech

… but then I’m more amazed at how much Nitin knows about me.

He’s aware of my salary increase two months ago, the fact that
I do my shopping at Tesco, the news that my car loan with Ford Finance will
finish in October, making me £500 a month better off and more.

It’s almost as though Nitin is me.

As I leave the bank, I start playing with my PFM app on the mobile,
looking at the balance of money between the mortgage I’ll be taking out and the
car loan that comes to an end in October, and realise that I could have
afforded the slightly more expensive house that I hadn’t looked at because the mortgage
payments would have been £250 a month more than I could afford.

From October, I could afford them.

Wow!

So I start heading for the real-estate agency to arrange a viewing
on that house.

It’s only a few short steps from the bank and then …

… I get an alert from Nitin via text again: “Yes Chris, we’ll
keep the same mortgage over the same term at £2,750 a month” – I had been looking
at paying £2,250 a month – “ and will reduce rates by a further 0.15% if you
can conclude the application process before the end of month”.

I could keep this scenario going further, but you get the idea.

Yes, it may seem creepy but equally some would call it
service and, for that service, I’ve given the bank and Nitin permission to mine
my data.

Does it seem creepy to you when Apple recommends songs you should
like or Amazon books you might read?

No, so why is it creepy when banks recommend things?

Mainly because we don’t trust banks the same way because banks
deal with our ability to pay, whilst Amazon and Apple deal with trying to get
us to buy.

We like buying things, we just don’t like paying for them.

So that gets me to the real point, which is the digitisation
of the relationship needs harmonisation with the real world.

We do have real world needs for advice and support and always
will.

We just need to marry those real world needs with the fact
that our digital footprint today can augment and enhance our relationship with
money and with our bank far more than it ever did before.

And, for a bank, the biggest problem is how to harmonise the
data and digital analysis across their legacy which was built for channel silo’s,
rather than omnichannel integration.

More about the data themes:

• Data is a currency … we just haven’t realised its value yet  (August 2011)
• Data not only measures progress, it inspires it  (July 2012)
• The future competitive battleground   (November 2011)
• Why banks should worry about Google, Apple, Facebook ...  (April 2011)
• Bank's biggest weakness: drowning in data  (November 2012)
• Banks should follow Google's approach to privacy  (March 2012)
• A big know know   (November 2011)
• Banks are just data vaults (March 2013)