At Dreamforce 2015, Anthony Morris of Salesforce walked through what’s changing in the digital banking world. He also highlighted some disruptors and interviewed two innovators: GE Money and Webster Bank.
Key statement: “Banking is mandatory. Banks are not.”
“Banks must adapt or die in a digital world” – Financial Times August 2015
The whole banking model is changing beneath our feet. Banks must take the valued knowledge of a customer 30 to 40 years ago in a branch model and translate it to digital.
What is digital banking? It means different things to different people.
Most apps today are very transactional, but customers want the whole bank to be on their phone.
Disruptors:
- Fidor Bank onboard customers at 1% the cost of legacy bank
- Number26 onboards customers in 6 minutes
- Funding Circle 40% of cost to originate a point of sale in real time
Think about your experiences:
- We can move money.
- We cannot use a service, raise a request, get advice, alert you, etc.
- See the gap?
What do customers want?
- Full control
- Personalized service and advice
- Understanding and immediacy
- Awareness accountability
Barclays has an amazing home-buying journey app. That’s a good example.
Banks need to deliver simplicity, process innovation, speed, security, consistency. What happens today is one mortgage company uses 19 different systems to initiate a mortgage. But the disruptors use one system.
Examples:
- Show PFM tools and giving you info on your spending.
- Show mortgage savings.
- Real-time alerts if something goes wrong.
- Why aren’t you pushing alerts and then giving options like “I approve” or “talk to someone”
Banks like GE Money, BBVA, and Barclays are starting to change the game. They are changing themselves from top to bottom. They are moving from transactional to engaged with their customers
Interviews
Greg Jacobi – SVP Distribution and Customer Experience at Webster Bank, the largest health-saving provider in the U.S.
Hamish Blank – Product Director, GE Money in Australia. Initial test with Salesforce increased closings by 30%.
Question: How would you classify the shift to digital banking? Is this another channel or a mechanism to disrupt?
Greg Jacobi: It’s completely disruptive. There’s an opportunity to leverage the emotions and attachment to money. Can’t dehumanize.
Hamish Blank: It wasn’t that long ago that mobile was just another channel. But GE Money is on a broader digital transformation program. It allows them to leverage a significantly different cost base.
Question: What are some of the challenges that got you from A to B? What’s the journey?
Hamish: We started with a simple decision on credit application form. There are so many other steps in the process. GE Money rapidly realized they had a lot to do. If they tried to do it piecemeal without a total plan then they were setting themselves up for failure. Want to be more adaptive to customer needs at lower costs.
Question: What demands are you hearing from your customers for digital services?
Greg: Customers want that whole bank. Customer start off being excited about the simple transactions but then they have a problem and the app falls flat. That immediately turns into frustration. Webster is learning that it’s not just taking a couple things and putting them on a screen.
Question: Where do you see the challenge to bring the organization around to delivering the entire bank to digital?
Greg: A lot of people think digital is automation. But it’s about re-imaging all of this. Think about how Uber upended the taxi industry.
Question: What do you see as the complexity here?
Hamish: Customers are expecting that whatever they can do should be easy. But there’s a lot of things going on. GE Money is learning every day that you have to deliver an intuitive experience without an instruction manual.
Question: Digital natives differ from the older population. How do you see the differences?
Hamish: We are lucky enough to have a UX lab which helped a lot. We built a simple app to accept a loan contract. Within the first month of rolling it out, 50% of customers were using it. Customers wanted ease and speed. If you give it to them, they will take it.
Question: How are your organizations embracing digital?
Hamish: A few years ago our journey began with a chief digital office and rapid delivery teams. Every product has a team. They can pump out new features or little changes every month. That flexibility is important. The priority project are all customer facing. Our partners now expect quick turnaround too. The merchants give feedback and expect change.
Question: Greg, this is a big shift. How is your bank starting to embrace this?
Greg: We aren’t as far along as GE Money but the first step is realizing there is a problem. You have to look at the skills sets and competencies outside of the tech. It’s not something you can hand over to someone else. There’s a lot of change going with the physical locations. They have a lot of capital reordering to do without losing the soul of the bank as a local bank. They want to break the limitation on doing things in physical
Question: In light of the shift to digital, what are the implications to your existing face to face / personal touch model? How are you wresting with this shift?
Greg: The point about the banker is really important. We forgot about the banker and left the relationship behind. We also forgot to deliver tools to our local bankers as well. It’s not just about outward facing. It’s about making the internal tools good.
Hamish: We are half the number of branches we used to have. We don’t want to lose the essence of that personal touch. Sales people exist for a reason. Have to take a look at that total business model and understand what you are willing to sacrifice in this change.
