Is open banking destroying the customer experience?

I recently came into some funds and, being conscious of the financial services compensation scheme (FSCS) limiting bank insurances of deposit accounts to ￡85,000 (€100,000 EU; $250,000 USA) have had to open new accounts to move things around.

In general, the remote account opening experience with newer neobanks is pretty good. On the other hand, the feeling of moving funds around is a nervous one.

First, you have to check the neobank has a bank license and is covered by FSCS; second, you move a small amount to test the process; third, you find that you go through various layers of links from identify onboarding firms to payment service providers (PSPs), and realise that the bank doesn’t control half of their onboarding or fund movement processes; and more.

In fact, it gets worse. Take a thing that used to be simple: paying my credit card company’s monthly bill.

It used to be bish, bash, bosh. You just sent a cheque in the post or swipe to pay. Now you have to logon to the app and make sure it recognises you. It’s not so difficult with FaceID but, quite often, my phone forgets my account details, probably due to an Apple overnight update. Then you have to retrieve all those account details – specifically a forgotten username and password – and reset the account up again.

Then you get to make that monthly payment and it starts with getting into AMEX followed by approving the amount to pay and then being transported via another app to the bank, where you have to logon to the bank and hope that the phone hasn’t forgotten their logon details. Then the bank wants security approvals and send you an email and SMS text to approve the payment; then you get returned to the provider and see that the job is done, as long as you refresh the screen.

THE CUSTOMER EXPERIENCE IS AWFUL … and getting worse.

Now, purely because of where we sit, we understand what’s going on. We understand the process. And, tbh, it is fantastic to have all these layers of security. But can’t we simplify the process?

The issue with the process is the lack of a seamless, frictionless, integrated ecosystem. We may have ID providers, gateway keepers, payment service providers, open finance API services, but when each is visible to the customer experience and lack a properly ?seamless, frictionless, integrated process, then things are not working well.

How could it be improved?

Well, if I can login to one provider with a biometric, why aren’t all the other providers using the same access, authentication, verification and identification? Why should the customer have to authenticate, verify and approve every step of the way? Why isn’t it automatic?

Well, maybe it is the fact that anyone in my family could use the finance apps on my phone whilst I’m asleep (Face and Touch ID is not that secure if you are sleeping), and there always needs to be checks and balances: not bank cheques and bank balances but secure processes to make sure the customer does not lose out.

However, as each year we develop new financial services using technology, we need to ensure it improves the customer experience and doesn’t destroy it.

Interestingly, tokenisation may be the answer.

In a move by MasterCard the other day, they are dropping card numbers – the 16-digit numbers you have to enter to buy online – and moving to tokenisation and biometrics.

This just another step in the process of making?physical cards obsolete, as mobile wallets and biometric authentication become the standard. Is this the answer?

#justsaying