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Digital banks think differently

Six years ago, when #innotribe first started at #sibos, we were given the chance to pitch an idea.  My team’s idea was to integrate the trust you have built in the social network into the financial credit scoring system, and give you a trust score that could be leveraged by the bank.  We didn’t win the pitch competition, but I’ve always believed this is a great idea.

The problem is that very few banks can use this idea.  Most banks have difficulty in getting data together within the bank, let alone integrating data from outside.  Most banks are not tagging their data, let alone analysing it.  According to Forrester, the typical company only tags 3% of their data and analyses 0.5%.  So most companies are throwing away 99.5% of their leverage with the customer.

Banks are better at this than most I believe but, even so, I know that hardly any bank has a single view of the customer.  That is because banks are silo-structured and product-focused, two things that have to change before they can use data analytics effectively.

Nevertheless, I have seen a few fintech startups using social media to augment financial data.  There aren’t many out there, but there are a few.  And I met one today.

This bank is a new digital first bank.  They have no branches.  Today’s bank talks about XRM rather than CRM, which I love.  XRM is Experiential Relationship Management, as that’s what it’s all about.

This bank focuses upon the customer experience, and believes that you can only deliver a great experience if you develop a holistic view of the customer from their entire digital footprint, and automate context around that footprint.

Experience Design

Picture via @usabilla on twitter 

This bank talked about using LinkedIn and Facebook to check that if you say you are a Director at ACME Inc. since 2009, that your profile matches this statement.  If your profile is a year old, with two links and no friends, hey, you’re not approved.  If you’re LinkedIn with lots of ACME execs and show that you’ve been there since 2010, you’re in.

This bank talked about looking at your Facebook Likes, and if you like Mercedes and have a passion for the Mercedes W222 S-class, then they would crowd source you and 1,000 other fans of W222 S-class Facebook fans who are registered with their bank to buy 1,000 W222’s with deep discounts.  The bank gets the loans, the customer gets the car and the manufacturer gets 1,000 sales that would have taken a year to deliver.

This is the new world of digital banking from a digital first bank.  No constraints, no ties and no legacy.  No silo data, no product focus and no channel mentality.  Today’s bank thinks about the User Experience (XRM); yesterday’s banks think about the product and how to sell it (CRM).

I love the new bank and, in a few weeks, will blog more about this bank.  In the meantime, can anyone guess who it is?


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.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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  • Joao Bohner

    “That is because banks are silo-structured and product-focused, two things that have to change before they can use data analytics effectively.”
    Excellent and real!
    Let us think the Bank’s structure as a ‘body’ and ‘cosmetics’ which make this body attractive.
    The ‘body’ is described in the above sentence.
    The ‘cosmetics’ are the social networks, tablets, smartphones, ATMs, branches, etc., which attract users to the ‘body’.
    But to be just attractive is not enough. It must to be efficient too!
    I’m working on building “The Bank of the Future” Architecture, to solve these two ‘things’.
    The first is resolved through a single source of knowledge. (Silos eliminated).
    The second is solved by processing the Information Corporately. (The product is merely a ‘label’ in the information).
    And then, with nice ‘cosmetics’ and a strong and agile ‘body’, the User Experience will be great!

  • On this one I don’t think executives are the issue. Someone somewhere is tasked with “Building the single view of the customer”, but then can’t get it past the Data Protection Officers, or prove how it’s treating customers fairly. Then there will be a cost, and cost board don’t approve it because one of the vendors isn’t an approved vendor…
    There are all these SILLY things that get in the way of doing the RIGHT thing.
    You can spend a £100 million on a single customer view project and deliver nothing if you don’t have the grunts who know how to run the gauntlet that is delivering ANYTHING inside a bank.
    It’s like trying to give birth to the jolly green giant whilst completing the course of Ninja Warrior. The banks reaction to compliance is to create tick boxes processes that stifle innovation, and do nothing to prevent the next big PR disaster.
    The checks and balances don’t work, and they’re killing the business of banking.