Why Is “being More Human” Crucial to Better Banking?

Ever since former Barclays boss Antony Jenkins said it could take ten years to rebuild trust with customers in December 2013, there has been a perception that organisations operating within the financial sector have been committed to changing and improving the services they offer their customers.

Dan

The seven-day switch guarantee for changing bank accounts, which came into effect in the same year, has also had a big impact. In the first year of the scheme alone 1.2 million customers took advantage of the service.

Recent research from the Financial Conduct Authority indicated that one third of customers would be more likely to switch from a bank or building society if they could keep their account number. With this in mind, it’s clear banks need to think carefully about nurturing individual relationships and the role of convenience in their customers’ lives – especially if they want to keep them.

With new services like Mondo, a banking start-up that fuses digital with real-life activities, gaining momentum and column inches, being more human is increasingly important for business. Mondo, which was unveiled at our London Tech Week expo, Tug Life, is not only committed to providing a more human approach, it’s using digital tools to do so. Mondo intends to tap into our growing appetite for technology, and invest in championing the convenience and control customers want from their personal banking. That is testament to the changes happening within the sector.

Mondo’s success will largely be determined by how it uses digital to fulfil our real-life banking needs. Digital channels by their very nature of being direct and instant are perfect for establishing contact with individuals. However, there is a stigma associated with the word digital, that implies automation and, by extension, losing the human touch. A well-crafted digital solution, if created with the customer in mind, can mitigate this risk and bridge the gap smoothly, but only if it fulfils and responds to a specific need.

As Chris Popple, Managing Director, Digitisation at RBS stated at Tug Life, consumers require access to a combination of services, based around what they need. These services need to be delivered digitally, by people. After all, trust can only truly be earned with an informed service made up of knowledge, intent, relationships and ease.

So if we take Popple’s points into account, what does the future of banking look like?

More importantly, how is digital shaping that conversation?

For starters, banks need to ensure they are not offering a bland service. If they are using digital tools they should be adding value to customers and constantly providing them with new services, which enhance the experience they have at the point of interaction. Simply relying on traditional technologies is no longer enough, especially when apps like Viber offer a bold and over-the-top product. These examples highlight a real step change in what consumers now expect. If your digital offering is not on a par with them, your customers are unlikely to actively engage.

Organisations need to gain a sound understanding of their customers and the role digital plays in their lives. Terry Cordeiro, head of digital transformation at Lloyds, believes that banks need to look at building on their existing digital relationship with consumers. Speaking at Tug Life, Cordeiro said that banks are in danger of losing their value if they don’t adapt.

Cordeiro was quick to point out that mobile banking is ten times more effective and immersive than telephone banking. But banks need to understand why and how customers are using these new, better alternatives.

Furthermore, banks should ensure they are continually listening to what their customers are saying to them and engage with them as human beings. If they treat their customers like robots, something is clearly going wrong. In the case of online banking, digital tools have not only helped to create a more efficient service, they have empowered customers to take greater control of their finances on their terms. However, innovation in this sector is imperative to avoid stagnation. Services need to continue to be relevant and deliver value to consumers, making their lives easier and facilitating a positive relationship, without the necessity of face-to-face contact.

Cordeiro went on to explain that the rising threat of start-ups is applying further pressure. As The Guardian reported in June, there are multiple challenges from aspiring new banks currently in talks with the Bank of England to gain their licenses, in a bid to win customers from a market long dominated by the big four.

One of these, Atom Bank, a digital-only lender with designs on winning both personal and small business customers, was given the green light by the Bank of England only last month. The fact that these new services are all trying different models means banking organisations small and large need to take note and focus on value.

With customer expectations rising constantly, people are inevitably asking more questions about the services they receive and the extent to which they are able to conduct certain tasks. Digital is critical to shaping this dynamic and redefining the relationship between the financial organisation, the customer and the technological services they use.

Banks ultimately can’t afford to ignore these industry changes. They need to think progressively and continually look at how they can evolve and adapt their services to respond to customers’ needs – especially with a growing threat from a number of new entrants to the market.

In essence, banks can learn a lot from Atom Bank’s founder Anthony Thomson, the brains behind the seven-days-a-week Metro Bank. They need to recognise the power digital has in facilitating convenience for customers, transforming the services we interact with and how the delivery mechanic of these services can be shaped. This will surpass and enhance more traditional means, whilst still offering a truly human experience.