By Steven van Belleghem is one of the world’s leading thought-leaders, speakers and authors on customer engagement.

Over the next ten years, the financial services industry faces a number of potential disruptions. Emerging technologies, the rise of neobanks, growing concerns about climate change and the social impact of banking will all shape the relationships between customers and brands, but these disruptions hold as much risk as they provide potential.

Over the last ten years, the relationship between customers and brands across most industries has developed to the point where a good product and a convenient service has become the minimum standard expected by customers. The challenge for financial services companies will now become how stand out from competitors and create a deeper connection with their customers. The best way to do this is to create an ‘Offer You Can’t Refuse’ for customers by investing in three layers of customer experience: 1. offering ‘Ultimate Convenience’, 2. becoming a ‘Partner in Life’, and 3. helping customers ‘Save the World’.

1. Do you offer ‘Ultimate Convenience’?

Financial services firms around the world have been amongst the most proactive in trying to offer the ultimate convenience for their customers with frictionless, zero effort, invisible and personalised services.

Alibaba Group’s mobile and online payment platform, Alipay’s “Smile-to-Pay” system is one of my favourite examples, and more and more players are now using facial recognition features to allow easy payments. Similarly, UK-based company, GoCardless have created a platform that allows small companies to accept bank-to-bank payments in a way that is a fast and frictionless alternative to card payments. Even the notoriously unpopular insurance industry is trying to remove all friction from the interactions with customers.

One truly visionary example from ING is their subsidiary FINN. Its aim is to make payments between machines possible and safe with a view to the upcoming age of the Internet of Things. ING clearly believes product purchases will be replaced by services in the near future, so we will rent a washing machine and pay for each time we use it, for example. If this washing machine is fitted with FINN technology, there will be a constant flow of payments between the washing machine and the original manufacturer. Every time the machine is used, it will automatically pay the manufacturer the appropriate fee. This kind of safe machine-to-machine payment opens the door to a completely new business model.

2. Are you a ‘Partner in Life’?

Income and savings are inevitably some of the most important frustrations and concerns in the minds of consumers. This creates enormous potential for financial services to enable a better life journey for their customers, and many are already stepping up and focusing on a ‘Partner in Life’ strategy.

Hopes and dreams come in many forms, and very often, saving money to be able to accomplish them is an important part of that. The Spanish bank BBVA answers to this need with their app feature, Bconomy, helping customers to not only set goals, save money and track their progress, but also compare their spending to similar people to see if they are managing their money well.

The success of new, smaller and generally more innovative “neo-banks” has largely been built upon on a strong digital and highly user-friendly offering. Monzo is one of my favourite examples here, starting everything that they do with the customer – understanding the frustrations, problems and ambitions that people have with their finances and formulating an offer that addresses each and every one. Their Salary Sorter allows customers to divide up their wages into three portfolios – one to cover all the obligatory monthly costs (rent, electricity, food, etc.), an optional second for savings and then whatever is left over goes into the third portfolio, which is available for the customer’s free use. Of course, the customer retains at all times the right to decide what he or she spends, but the likelihood that someone will spend too much in any given month is significantly reduced.

A ‘Partner in Life’ champion in the insurance industry is Trōv, which offers, among other things, flexible on-demand mini-insurance that covers individual items like cameras or bikes. The great part is that you can activate it for any duration you require with a simple swipe on a smartphone. For many people, these types of insurance are too expensive or too much of a fuss but Trōv makes them accessible: for instance allowing a freelancer to insure his or her PC or smartphone against loss, accidental damage or theft when leaving home.

3. Are you ‘Saving the world’?

When Michael Porter wrote about “Creating shared value” in Harvard Business Review he argued that (1) the world is facing many challenges and that (2) the companies have the means and the resources to solve these challenges. In this new phase of capitalism, companies should generate both economic and societal value, using the strengths of the organisations to make a positive difference in the world. We are already seeing this dynamic surface in the financial services industry.

Bank First, for instance, was born when a group of 48 educators came together with a shared belief. They had grown disenchanted with the way many Australians were being treated by the big banks and wanted a financial institution that placed a value on what people did for the community – not simply by how much money they made. So in 1972, they started their own financial institution – a mutual bank owned entirely by customers. Founded on care and compassion, their first loan was to a single mother for a bond to acquire housing for herself and her two children. After 4 decades of financially empowering educators to realise their dreams, they are still driven by the same founding values and focus on putting their customers first.

Amsterdam-based digital neobank bunq, has put the environment at the core of the company ethos. It was the first bank in the world to offer ‘freedom of choice’, letting its users choose what their money is invested in so they can make sure the funds aren’t used to benefit the tobacco industry, weaponry or any other kind of ethically questionable business. In 2020, bunq, which now operates in 30 countries throughout Europe, took its efforts one step further. The company partnered with Eden Reforestation Projects to plant a tree in Madagascar for every €100 spent with bunq’s SuperGreen account. The reforestation efforts are also aimed at providing jobs and security to locals. Today, the bunq community has already planted one million trees, a threshold hit six months before expectations. The app also allows to create a Common Goal for any cause that matters to you, no matter how small or big: from renovating the sports court to saving the ocean from nasty plastic.

MasterCard, too, has been engaged for many years in a project to help people who have no access to financial services. Their Centre for Inclusive Growth has already given 400 million people better and safer financial assistance. In 2018, MasterCard invested 20 per cent (500 million dollars) of the fiscal benefits it enjoyed as a result of tax reform in Europe and the United States in the fund it had set up for this purpose. This project has already created social value for half a billion people and in the long run it will provide MasterCard with a bigger market that will allow the company to create economic value as well.