Will Snapcash provide the service blueprint for banks of the future?by
As Barclays takes the plunge into video banking services it is clear we are entering a watershed era of significant change in an industry that craves disruption. It’s about time too. The finance industry has lost the trust of the public in recent years and with the Millennial Disruption Index reporting that an astounding 60% of millennials claim they would be happy to bank with a non-financial services company, it seems the banking sector is starting to take note of its vulnerability.
There is still a long way to go, but by recognising this need for change banks are starting to make ground as they better serve and connect with their digitally native customer. So, as technological innovations continue to lead to digital devices being the principal experience of a bank, how can the industry take advantage of this disruption and ensure the demands of their customers remain at the heart of this evolution?
A shifting environment
The banking world is an industry rooted in tradition and we are seeing very little innovation coming from within the financial environment. Instead, banks look to consumer trends outside of the sector to inspire their next move. A case in point is the adaptation of mobile devices into the banking process, with 1.75 billion people predicted to own a smartphone by the end of 2014; it was a shift that the industry could no longer afford to ignore.
As the banking ecosystem adapts to this change we will see a change from branch-centric banking to mobile-centric banking. Without the level of human service available within branches and the loss of advice-centric banking, advances in technology based recommendation will reinstate this service available to the lower-spending user. Where consumers are currently being sold financial products by branch staff, they are not being provided a tailored service, an element that will quickly change in the mobilisation process.
Brands, not banks, are spearheading the financial revolution
The recent industry change has largely been dominated by new entrants looking to capitalise on the inadequacies of existing players to establish themselves. Backed by major marketing spend to rapidly develop market awareness, Metro Bank is one example that is trying to overcome steep heritage through overt branding and identifying consumer frustrations with existing players, such as being closed on Sundays.
Adding to this, digital innovation in the way banks provide their services is also taking a swipe at the old guard. Perhaps the most significant of these is Snapcash, the latest offering from social photo sharing app Snapchat and its partnership with financial services company Square. Once Snapchat users have linked their debit card to the app, they are able to send Snapcash to anyone in their contact list who is eligible to receive it.
This is just the start as other social networks such as Facebook and Twitter, who have already announced moves into the space, follow suit.
Innovation in digital key to success
Historically banks have focused on advertising as a means of promising an experience, but it’s now all about investing in customer experience and physically making things better for the consumer. By adopting technological innovations and focusing on the consumer, banks will have a viable plan to retain customers and keep the brands at bay.
So in this digital revolution, a few points clearly stand out:
- Become truly omnichannel by auditing and servicing the myriad of interactions with customers. Banks need to follow the examples set by other sectors and focus on streamlining their processes when it comes to customer interaction, with digital a clearly entry point for most. With a growing digital population – including millennials – these demands are only likely to increase.
- Stand for something. Differentiate the brand and ensure that it informs every part of the service they provide. According to the Millennial Disruption Index 53% of participants think that all banks have the same offering, making differentiation key. This is surprising as according to an Accenture report, 27% of consumers would consider a branchless digital bank. But this has not gone unnoticed by specialist players such as Atom Bank, the world’s first bank to look to offer customers an exclusively digital experience.
- Use Big Data to inform their recommendations. Big Data can be used to not only to learn more about customer behaviours but also to help introduce and evaluate digital innovations. The better the analysis, the more accurate the insight. Innovations therefore such as giving consumers greater insight into their own finances including spending patterns, are highly likely to build trust and loyalty. Big Data is therefore essential to help consolidate first mover advantage.
Anant Sharma is CEO of brand interactions agency Matter of Form.