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Are digital banks losing sight of the customer?

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In a discussion of the future bank, it appears that we all talk about digital being the focal point.  Even though my new book is called that, it’s the wrong focal point however.

Customer is the focus.

It’s too easy to get wrapped up in the technology and forget about the customer.

That’s what worries me today when I see banks rolling out sexy apps and wearable gadgetry, when the real point is the process, information, service, capability and competency of the bank to evolve their business with the technology.

And to do that at the speed of the customer’s need.

This point struck me on the one hand, the way in which new entrants are offering digital channel services; on another hand, when looking at how existing banks are renewing their internal systems for digitisation; and, on the other hand (yes, I have three hands!), from the delivery of digital channels from some of the existing banks.

On point one, new entrants are typically targeting the digital native innovator.   On the edge of technology, comfortable with all that’s uber tech cool, these early adopters are going to naturally migrate to the new start-ups because they like to always be the first to have anything new and edgy.  That is not the core domain of the bank’s customer base and is the reason why banks are happy for the innovators to innovate.

What banks do is copy innovations as they become mainstream.  This is why banks get to do mobile apps and PFM about two years after they first appear on the market, and about ten years after the technology community started talking about it.  That’s ok, as they move at the speed of their customers and their customers are slow.

Nevertheless, these banks are now finding their incumbent and embedded legacy is slowing them down, and so systems  renewal and renovation is on the cards.  Now the challenge of systems renewal is how it is done and all banks seem to have different views and approaches.  The commonest is to refresh to the lowest common denominator, as that’s the least risk approach.  This approach means consolidate to the platform that offers the least risk.  This is a classic view of renewal, but it challenges the bank as it often means consolidate to a platform that is proven, stable and resilient … and old.  The banks that are proving themselves fittest for the digital age do not take this approach, but instead work with their consulting and technology partners to completely refresh their platforms to be fit for the future.

And there’s the key phrase: fit for the future.

Banks that refresh to the lowest risk platform are often digging themselves a timebomb, as they have just refreshed to a platform fit for the moment rather than being fit for the future.

And forget future-proofing or other such goobledy gook.  What I’m talking about here is being really ready for tomorrow, not just today.   It is  the reason why banks such as BRE Bank , now mBank, and Commonwealth Bank of Australia have completely rearchitected rather than just evolved.   It is also the reason why these banks are discussed as the leaders in the digital bank revolution, rather than just the also-rans.

Finally, there’s the delivery of the digital bank services themselves.

Some banks do this with supercool firms like Frog Design or Ideo in the heart of the mix.  They shakeup their entire user experience view from the ground up, and build a bank that remotely engages the customer in a way that intuitively suits the customer.

Other banks try to do this with other partners, that are slightly less interesting and slightly less customer engaged.  I worked for one such company at one point, and we delivered a digital bank service that even our developers found hard to register with.  And there’s the real rub.  We can develop digital bank services today using amazing technology, but if it ever loses the customer focus then it’s about as useful as a one-armed trapeze artist with an itchy bum.


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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, 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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