After PSD2 and GDPR, what Wayfinding Signs will guide visitors through an Open Bank?

When branch banking was the mainstream method of service distribution in financial services, both a bank’s customers and potential business partners could follow clear signs that directed them where to go and who to contact. The first sign that a bank sent its customers and potential business partners was the geographic location of a bank branch. Banks would research locations and districts to assess primary demographic segments. Banks would estimate local demand for consumer and small business deposit and loan products. Optional service overlays such as wealth management, mortgage, large commercial and ATM services would be added to the branch design, depending on local variations. When staffing the branch with decision-making business developers, banks would devise growth expectations for the local market, focusing on household/business formation, stable versus ‘in play’ customers and localised competitor activity.

Once the provision of a local bank branch had demonstrated a bank’s interest in them, visitors to the branch, whether potential customers or potential business partners, would expect clear signage in the branch to direct them to the right place. Banks made an extensive investment to tailor the interior space to the culture and desired experience. The focus was on enabling bank staff to easily connect with their clients and business partners. The bank also tailored the branch to its local characteristics and didn’t install the same branch design every time and in every community. A branch in a leafy and wealthy suburb full of retirees would be great for deposits and pensions yet have few lending opportunities, so the right mix of teller lines, pods and self-service would be assembled for that demographic. A branch on the High Street would have lots of retail business customers with revenue collections to lodge, so the right staffing and counter access would be assembled for that purpose.  A branch near a port or an industrial estate full of warehouses would have more foreign exchange tellers and more pods for business banking and trade finance. Specifically, banks looked at each local market’s components and then tailored its connection.

Once a bank branch had assembled the appropriate connective environment, it would intentionally aim to communicate its brand message in graphics, colours and materials. This could not be guesswork because these components drive action – action taken by bank staff to use these materials to cross sell and action by the customers who are now educated on what that bank could offer. Banks are highly skilled at designing branches that reach their goals of increased wallet share, increased loans and customer growth through focused strategy, tactics and action.

Can we infer the signage needs for Open Banking from Branch Banking? Even at this early stage of its evolution, it is possible to foresee an environment where Open Banking could become as dominant a means of service distribution as Branch Banking. If Open Banking becomes the mainstream method of innovation, competition and distribution, many thousands of third-party service developers will want to leverage banking APIs at hundreds of large banks, who can provide a marketplace to reach hundreds of millions of payment account users.

The specificity of the commercial goals of third-party developers causes a new signalling challenge for banks that wish to develop their capabilities and partnerships for ecosystem-versus-ecosystem competition. The inevitable increase in the pace of innovation and competition will also force more thought and design in the signalling to end users of these services. Signs will have to be specific, easy to follow and make a call to action. Signs are advertisements and as any advertiser knows, you need to get the visitor to do something.

 Open APIs as Outdoor Signage

Outdoor signage is arguably the most important kind because it’s what gets third-parties in the door, the largest hurdle to beginning a relationship. Exterior signage is the first impression third-parties have of a business. These signs need to do more than simply announce who you are, they need to draw in people and make them want something from you. Effective signage may encourage third-parties, whether customers or business partners, who have passed a bank many times before to finally give it a chance. Published Open APIs are effectively the Outdoor Signage for ecosystem-versus-ecosystem competition. They are automated and not relationship specific.   Business partners find specific banks through their Open APIs and then build out further commercials. The suite of Open APIs needs to be wide, diverse, fluid, experimental and scalable to attract new participants into the bank’s orbit from the footfall outside.

Job Roles as Directional Signage 

Branch bankers have always employed directional or wayfinding signage. These signs help the visitor navigate the bank branch more easily. The easier it is for a visitor to find what they came in for, the more likely they are to rely on that convenience in the future. 

If a bank wishes to gain ground on its incumbent rivals and attract more developers and thus orchestrate a more vibrant and faster growth ecosystem, the ability of that bank to quickly direct third-party developers to the appropriate resources within the bank will be a critical success factor. Ideally, the “Outdoor Signage” of published Open APIs will be the starting point for some very valuable strategic partnerships, covering some very meaningful revenues, assets and data. Third-party developers will want to follow in-bank signs to reach a destination where the bank has a person or machine (or a combination of both) with the right capabilities and authority to advise and/or transact.

Job Roles in an Open Bank are directional signage and should be self-explanatory. Directional signage tells outsiders where to go. The many thousands of third-party service developers are very likely to have a very specific domain or microsegment where they wish to collaborate with a bank.  If the bank account user is a consumer, the microsegment could be just one from a list of “gets a job”, “buys a car”, “is a frequent leisure traveller”, “ changes job and relocates”, “gets engaged”, “purchases a home”, “gets married”, “becomes a parent”, “makes major home renovations”, “customer’s child is a new teen driver”, “customer’s child goes away to college”, “finalises plans to end full-time work”, “customer’s child gets married”, “becomes a grandparent”, “customer’s spouse retires from full-time work” or “retires from full-time work”.

Once a bank starts putting up directional signage for an Open Bank, it will become far clearer if the bank is arranged in an orderly fashion with some rhyme or reason behind the organisational structure. Not only does high quality directional signage benefit a bank’s potential customers and business partners, but it also makes the bank’s internal structure more coherent and organised. For example, if a third-party service developer wishes to strike a revenue sharing arrangement for referred home improvement loans in the microsegment “customer makes major home renovations”, where do they go and who do they talk to that can strike that deal? Is it the bank’s “Head of Consumer Loans”, “Head of Customer Experience”, “Head of Customer Insight”, “Head of Digital Experience”, “Head of Digital Service Design”, “Head of Digital Strategy”, “Head of Digital Transformation”, “Head of Digital User Experience”, “Head of Enterprise Partnerships”, “Head of Innovation”, “Head of Innovation Management”, “Head of New Business Development”, “Head of Strategic Initiatives” or the “Head of Strategic Partnerships”? While it would be unfair to say that one single bank carries these job titles, many banks have a significant number of these job titles. One of the basic design principles for a sign is “Contrast and Spacing”. There seems to be very little contrast and inadequate spacing between this list of job roles. At this stage of the evolution of Open Banking, it is arguable that many banking job roles currently facing towards the “Fintech” world are very high on strategic ambition but very low on real wayfinding detail for potential business partners. 

Sector Strategies as Persuasive Signage

Persuasive signage influences behaviour through convincing language. These signs can advertise a particular product or promotion. Persuasive signs or displays can influence visitor flow and improve interactivity with otherwise unnoticed products. Banks have very diverse and broad customer bases. Payment account users can be borrowers (or not) and depositors (or not) at the same time. Payment account users can be regular payers and/or regular payees. Some customers are frequent users of payment services and infrequent users of credit services. These usage patterns can vary hugely over the customer lifecycle. Banks have diverse and large segments to manage (private banking, corporate banking, small business banking, consumer banking etc.), with many customer life stages to consider. Banks will need to signal to third-parties which customer segments or life stages that they are keen to develop in partnership with developers. Signs that showcase a particular type of API product offer an opportunity for banks to communicate specific details of new or featured service domains.

PSD2 and GDPR Procedures as Compliant Signage 

Bank branches are often legally bound to provide accessibility by way of parking, entrances/exits, restrooms and elevators to make disabled patrons’ experience more comfortable and productive. Interior signs indicating bathrooms, elevators, entrances and exits can also have to include Braille and tactile characters in legible fonts and contrasting colours, and they must be mounted at specific heights for consistency and access. Having high quality and consistent Compliant Signage is a fundamental contractual, reputational, operational and compliance risk management challenge for a bank branch. 

In an “Open Banking” context, PSD2 and GDPR effectively play the role of Compliant Signage. The PSD2 procedural rules will be highly specific due the PSD2 Regulated Technical Standards (RTS) and the defined scope of the exposed payment accounts, which will enable good quality Compliant Signage. In many ways, the Compliant Signage for third-parties on data-sharing procedures being deployed by a scaling Open Bank under a GDPR regime are probably more important, particularly in the domain of customer consent management.  Historically, there has been little diversity in the banking business models where third-parties “pulled” payments from customer accounts with their specific consent e.g. card schemes pulled payments when the customers permitted specific payments at retail point of sale and direct debit schemes pulled recurring payments according to mandates when utilities bills and loan repayments were triggered. There was also little history of payment account information (rather than payments) being pulled by third-parties with client consent, except with banks and large corporates through processes such as SWIFT messaging. As such, this type of specific consent management by banks was highly centralised, only taking place in centralised transaction processing units for a couple of highly-specified business cases. In terms of breaches, liabilities were assigned by a cooperative membership scheme, rather than a law of the land that is GDPR.

In contrast, a scaling Open Bank is likely to have a high number of data and service sharing arrangements with business partners, well beyond the scope of PSD2. These data-sharing processes will have multiple diverse business partners that could be distributed across business units in SME Banking, Consumer Banking, Corporate Banking, Private Banking etc. The ability to track specific customer consents across this distributed business development activity is a fundamental contractual, reputational, operational and compliance risk management challenge. Banks are likely to develop and enhance a“Client Consent Management Policy”, taking their cue from the Article 29 Working Party. Article 29 of the EU GDPR Directive establishes a "Working Party on the Protection of Individuals with regard to the processing of Personal Data". The Working Party seeks to harmonise the application of data protection rules throughout the EU and publishes opinions and recommendations on various data protection topics. Banks wishing to scale quickly and smoothly will need to develop clear Compliant Signage for GDPR that is consistent with their Consent Management Policy and points to scalable and flexible client consent management processes that can be used across multiple business models (Full Disclosure: I serve on the Advisory Board at Priviti, an early leader in consent matching platforms).

In crude conclusion, if a bank wants to operate a successful branch that attracts people, then it needs to get noticed – and smart bankers know that starts with branch positioning and signage. The visibility, messaging and quality of signs require a significant amount of development and consideration. Outdoor signage must be enticing. In-branch signs should be clear and useful. Signage helps bank customers navigate the bank branch without asking bank staff basic questions. Once potential customers and potential business partners follow the in-branch signs attentively, they expect to reach a destination where the bank has a person or machine with the right capabilities and authority to advise and/or transact. The same principles on team positioning and signage will apply when many thousands of third-party service developers emerge to leverage banking APIs. Open API suites need to be enticing outdoor signage. Highly specialised job roles acting as wayfinding signs need to make the empowered decision maker easy to locate. Regular and attractive persuasive signage needs to signal a bank’s current priorities and strategic direction. Compliant signage needs to clearly indicate to third-parties how a bank is managing its contractual, reputational, operational and compliance risks. At the end of a well-signposted and delay-free path, the visitor to an Open Bank must find a person or machine with the right capabilities and authority to advise and/or transact.