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Who’s going to serve the analogue people?

I can’t find it online but I was just in a session at BAI RD2015 http://www.bai.org/retaildelivery where the BAI research guys put up some slides on access preferences.  They called these “channel preferences”, as do most, but I cannot use the word channel without physically retching.  It’s a great way to bring on bulimia but, apart from that, I’d rather use the word access.

So the figures showed the preferences today and in three years (2018).  Today, the #1 choice is online (as in laptop/desktop).  Then it’s branch, ATM, mobile (and tablet), drive through and, finally, talking to a human on the phone.  By 2018, the picture changes to #1 still being online (really?), and then mobile (yay!), branch (still?), ATM (you still need cash dontcha?), drive through and call centre.

There was then some discussion about old folks versus young folks, and so this slide was thrown up (sorry, did someone say channel again?):


This is showing that millennials are all mobile-centric whilst non-millennials (old farts?) are more online and branch focused.  Maybe, but I feel we need to think of this differently.  The truth be told we have digital people, digital-analogue people and analogue people.

These three are not defined by age, ethnicity, religion or sexual preference but more by wealth, education, outlook and needs.  We need a new demographic for the psychographic age.

For example, I connect with a lot of people who are very comfortable with digital and being mobile first, including some over the age of 60.  My mother is far more comfortable emailing and facebook commentating as a relationship than calling me on the phone, and she’s slightly older than the normal digital demographic as am I.

However, I would say that I’m a digital person – I’m immersed in this world – whilst she is a digital-analogue person, as she loves being online but not mobile online.  Meanwhile, there are a range of people who don’t want to do anything with money on the internet as they don’t believe it’s secure, and these are analogue people.  Analogue people love branches where they can chat with Mary the Teller who they’ve known since their first account opening.

Fairy snuff.

But let’s extrapolate this out a bit more.  Who is the analogue person?  Yes, they probably are older or, if younger, they are likely to be less educated, less wealthy and less invested online.  The digital-analogues like the fact that they can go into the branch to smell the money, even though the money is no longer there.  The digitals just don’t care, and would rather do everything through an app or, even better, a tap on their wearable.  These latter two categories are likely to be more educated, wealthy and invested online.

The problem with this is that the analogue world is therefore left serving the less profitable whilst the digital world serves the mass affluent.  What does that mean over time?  The analogues get charged for using analogue services.  Oh dear.  These are the people who can’t afford those services, so eventually the most likely scenario is that they get shunted off to the Post Office to get served, as the Post Office is happy to process their analogue transactions for $1 a time.

Now that may sound like a sad world, but another thing will probably happen as a result.  As the underserved analogue people realise they’re being screwed for using analogue services, they’ll switch.  But what they switch to is the question.  After all, if mobile wallets can enable 1 in 4 people in Africa to exchange value in real-time, won’t it do the same for analogue Europeans and Americans?  Just a thought …


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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