Where’s does the human factor fit in the future of banking?

I listened intently to a room full of bankers last week as part of an excellent event ran by The Digital Banking Club. In one corner we had Zuckerberg wannabes in tee shirts describing their vision of banking. In the other, we had banking people in ties explaining how difficult it is just digitising current banking practises.

An exciting future ahead
There is some exciting stuff ahead if the visionaries of banking get their way. I liked the idea of consumers being paid for their data as part of a belief that a bank can make more margin from the data than it can from managing cash. I liked the idea that the app you use to pay for goods could automatically determine which loyalty points scheme to use as it accesses your aggregated loyalty points database. I liked the idea of a prepaid card that can be used to pay for goods in any currency and there would be no currency exchange charges levied.

The rise of Apple Pay is potentially an equal threat to traditional banks as the app consolidates a customer’s existing payment methods into a single method of payment via an apple phone, tablet or watch.

Branches - advantage or disadvantage?
The mainstream bankers, loyally defended their branch infrastructure. The reality is they have an asset which will be difficult to shut in large numbers. The argument for redeployment to deliver a relationship focus and perhaps advice in place of traditional banking transactions is a logical strategy. The desire for customers to see someone, particularly when in financial trouble, is also well understood. Cracking the delivery of financial advice at a sensible price is one of today’s challenges and will require self-service technology with an automated advice function, if it is to work in the context of a branch environment.

Still a lack of humanisation?
Looking back in my files, surprisingly, I last wrote about the lack of humanisation on the web in 2000 when I was involved in a creative pitch for a mainstream Building Society who was just getting into digital. The digital environment has changed a lot since. The advent of social media has created a sort of human element to the web, but how far does that expand into banking and personal finance?

In 2011 we noted BBVA had developed a site offering peer benchmarking of finances, so customers could see how their finances compared to people similar to themselves. The hypothesis being, if I see someone like me doing something then I should be doing the same. This feature now seems to be absent from their proposition, so maybe it wasn’t popular?

Our research into what people will do without a human advising them suggests there is enormous scope for technology to help bridge the gap. However, we are yet to test how far self-service can be taken when a customer needs more emotional support in times of difficulty or financial stress.

Humanisation outsourced?
This talk of how humanisation fits into the new models is interesting. The challenger banks with their internet only, mobile delivery, self-service propositions could be hampered by a lack of people in the process. How will they deal with those mobile users who suddenly need the guiding hand and considered judgement of a real person? Maybe they could outsource this type of contact to a specialist team of independent money counsellors? Using the latest mobile video and audio app on the smart phone, customers could have real time remote interactions? And for risk management, this technology records and stores the video in a tamper-proof evidence quality environment for easy access, should there be an investigation or complaint.

The biggest challenge?
Perhaps the biggest challenge to the mainstream banking players is this; merely digitising the traditional banking processes is not going to be enough. If you boil it all down, banking is about borrowing, paying and protecting money. New propositions need to do this in one coherent customer centric proposition and experience, as opposed to the siloed, channel product- pushing strategies, most commonly adopted by the traditional banking players to-date.