Digital Banking - Do, Buy, Partner or Die?

Back in the 1990s and you lived in that London, you’ll remember the pain of buying a weekly tube travel card. Queuing up at Brixton station close on 40 minutes every single Monday only ended with the arrival of the Oyster card and its magic auto top-up duly enabled. Times have indeed changed and today I brandish my contactless card at the ticket barrier and even Apple Pay can be used down there. New technologies and platforms are crashing into micro payments at breakneck speed and a looking at the core business of banking tells the same story (check out block-chain and other crypto-currencies if you want a glimpse into the future). How banks accept our money, raise capital from it and provide financial services back to us continues to morph faster than Tesla data driven car on insane mode.

Next week I am chairing a customer panel focused on banking and financial services at our Cognizant community event near Watford in London. This is the final session exploring what it really means to run a bank in the digital age from customer engagement, supporting process models to what actually constitutes money. We’ve got some big names from the world of finance discussing the inexorable shift (or drift) into all things digital. What I would like to do as chair is focus the conversation on three main areas which has most purchase for the audience: 1) What really is driving digital and spending and, 2) what could the next generation customer experience actually look like, and 3) where should leaders begin and (dare I say) end their digital journey?

So where is the big smoking gun behind digital? Do you think changing customer expectations, ever tighter regulation...or the explosion of fintech and start-ups are demanding a response? In fact, new start-ups are emerging thick and fast around Canary Wharf working agility, real-time response metrics and social tools and technologies into the business mix. From what I can see, they’re defining the game. Many of these newer players are offering interesting fintech solutions ( and thanks to my alma mater Forrester) such as AlphaPoint's digital currency exchange; milliPay Systems' micropayment service; StreetShares' peer-to-peer (P2P) lending service for small business owners; Taulia's supply chain finance offering; and TradeRiver's online trade finance offering. Another interesting vendor is eRipple: Its offering doesn't focus just on financial services but aims to accelerate innovation by identifying existing in-house experts and finding external experts with a strong reputation—which is really a Facebook style service for innovation. The big question is, will banks adapt to fintech and the raft of new players behind it or will fintech destroy the traditional bank...should be worth attending the panel just to hear the answers on that one. Do, buy, partner or die...

Another talking point is the next generation customer experience. How do you blend the current branch-centric physical experience with the new, upcoming digital one? Perhaps it’s here already in Japan (where else) where automatons in the shape of synthetic humans are actually replacing real people to do the mundane counter tasks (ok, ok, so it’s a gimmick and you can see it here but they spookily remind me of Channel 4’s excellent series Humans). Should banks and financial services firms perhaps look to retailers and borrow their omnichannel clothes? UK retailers are in fact, world-class at blending brands into the customer experience and offer good instruction and are starting to pivot technology organizations around the customer journey. No doubt, Banks and financial services firms are investing heavily in improving the customer experience and I must give a nod here to First Direct that’s made it its mission to boost front line service in order to maintain its industry leading customer service, in one case empowering frontline staff to send flowers to an account holder. But this is customer service, not experience. Measuring customer experience is much more subjective and collected data on it needs organizing into what happened; customers' perception of what happened; and what customers did based on their perception. Net promoter score doesn’t quite cut it.

Where is the starting point for the digital journey? I will defer to the panel and the discussion next week but I wouldn’t be true to my analyst routes if I didn’t make the call. My colleague Rob Brown talks about the concept of “digital acupuncture” which is bang on the money. These are the process pinch points where it makes sense to automate and digitize and these are good starting points. This idea of acupuncture sums it up perfectly—using software tools to automate repetitive, rote tasks and using the resulting telemetric process data to make meaning, fix and improve process flow where necessary. You can check out his take on intelligent process automation here. This is the application of smart software to do high-volume, repeatable tasks that usually take humans an unbearable length of time to accomplish and which they typically find mundane to perform—like issuing weekly travel cards on a Monday morning at Brixton tube. Or performing mind numbingly dull intercompany accounting tasks at a “large multinational music company” one of my first awful jobs on migrating to that London as we from North of the Watford Gap...described the greatest city in the world.

PS. A good friend’s parents had a full on rant about their banking experience when I met them recently—about not knowing who was looking after their money; not being able to put a face to the organization that was managing their finances, hating the internet for robbing the personal touch from their banking experience “we used to know our bank manager” etc. This is Ross-on-Wye mind (a beautiful part of England moving to a gentler, quirky pace) but they had a point and must challenge some of the UK’s banks. How does a long-standing high-street bank serving a wide berth of customers remain committed to providing the best possible customer experience to all its customers?