Back to banking basics: what customers should be getting from their digital banking provider

Author: Jerry Mulle

Modern, digital banks provide a range of slick, automated services. But are they providing the right ones?

The modern, digital, connected world is nothing if not complex and you could be forgiven for being confused about what exactly a bank is.

The truth is that for all the apps, ATMs, websites, teller-less branches, and slick, aspirational advertising a retail bank is still today what it always was; an organisation that takes deposits and lends them out again, making a profit from the difference between the interest rate it pays and the interest rate it charges.

That’s it.

Banking is fundamentally a simple idea and I think it’s time to embrace that simplicity and go back to basics.

In the last few years banking has coalesced around the idea that winning and keeping customers in the age of multi-channel banking is a matter of customer service. Good service means different things to different people – it’s nearby branches for some, usable websites or friendly staff for others – but it’s always about putting the customer first.

By going back to basics we can cut through to what really matters, to the fundamental principles that should inform whatever complex forms our modern bank takes.

So what matters?

Our simple bank takes my deposit, pays me interest and lends out my money. If we can assume that I’m confident my money is safe and that I can get it out whenever I want then all that’s left is my interest rate.

As a customer I want an interest rate that’s competitive, all the time, forever (or at least until I take my money out again). But circumstances change, products come and go, economies ebb and flow and therefore so do interest rates.

I understand that my interest rate may change but as a customer I want to know what it is now, when it’s going to change and what my options are before it does. I want staying with the best interest rate to be easy; automatic or at the touch of a button.

And I don’t want to have to ask for all this because this is important, I want to know that my bank is looking after me – I want to be told.

I think our back-to-basics bank has a lot to tell us about customer service and it begs the question, why isn’t this happening now? The information I want is basic and banks have it at their fingertips, so why isn’t it at mine?

Incentives

In the UK most current accounts are free but come with hefty changes for things like exceeding overdraft limits.

In a way that’s understandable; rules have to be enforced somehow and charging customers sends a clear message that most customers will understand.

But it also creates an incentive for banks to be uncommunicative because customers who aren’t on top of their financial circumstances, and who aren’t in possession of the most salient information at the most impactful moments, are likely to make mistakes.

For some modern banks misfortune has become a revenue stream – one that’s working against the best interests of customers and, I would argue, the long-term best interests of the banks themselves.

That source of income doesn’t exist in our back-to-basics bank remember and it’s another reason why focusing on what a bank is, at its core, might help us cut through the stuff and nonsense to create something really great for customers.

Getting the basics right

For a bank determined to get the basics right the digital channel is essential. Mobile offers a way for customers to stay in constant contact with the world and the web is platform where they’re comfortable getting things done.

Understanding what users want and telling them what they need to know at the time they need to know it, requires both.

Here’s my wish list for a back-to-basics bank that’s bang up-to-date:

  • If my bank creates a current or savings account with a better interest rate, or if my interest rate is going to go down, I want to know about it in advance and I want to be able to switch instantly with the touch of a button.
  • If I am ‘lucky’ enough for my bank to pay interest up to a maximum balance on my account allow me to automatically transfer 
  • If my balance drops below what the bank knows I pay out regularly before I get paid warn me and allow me to switch funds from other account easily.
  • I want to set a minimum balance on my account and when my balance drops below that I want to know right away so I can act right away or preferable have an automatic sweep from a savings account to top up.
  • If it looks like I’m going to suffer a penalty or break a rule I’d like to know in advance and, if that’s not possible, then I’d like the choice to ‘undo’ my last action and avoid it.

How easy is it to do that at your bank?

 

Image © flydragon, via Fotolia (File #55331581)

30 Apr 2015

Author: Jerry Mulle

Modern, digital banks provide a range of slick, automated services. But are they providing the right ones?

The modern, digital, connected world is nothing if not complex and you could be forgiven for being confused about what exactly a bank is.

The truth is that for all the apps, ATMs, websites, teller-less branches, and slick, aspirational advertising a retail bank is still today what it always was; an organisation that takes deposits and lends them out again, making a profit from the difference between the interest rate it pays and the interest rate it charges.

That’s it.

Banking is fundamentally a simple idea and I think it’s time to embrace that simplicity and go back to basics.

In the last few years banking has coalesced around the idea that winning and keeping customers in the age of multi-channel banking is a matter of customer service. Good service means different things to different people – it’s nearby branches for some, usable websites or friendly staff for others – but it’s always about putting the customer first.

By going back to basics we can cut through to what really matters, to the fundamental principles that should inform whatever complex forms our modern bank takes.

So what matters?

Our simple bank takes my deposit, pays me interest and lends out my money. If we can assume that I’m confident my money is safe and that I can get it out whenever I want then all that’s left is my interest rate.

As a customer I want an interest rate that’s competitive, all the time, forever (or at least until I take my money out again). But circumstances change, products come and go, economies ebb and flow and therefore so do interest rates.

I understand that my interest rate may change but as a customer I want to know what it is now, when it’s going to change and what my options are before it does. I want staying with the best interest rate to be easy; automatic or at the touch of a button.

And I don’t want to have to ask for all this because this is important, I want to know that my bank is looking after me – I want to be told.

I think our back-to-basics bank has a lot to tell us about customer service and it begs the question, why isn’t this happening now? The information I want is basic and banks have it at their fingertips, so why isn’t it at mine?

Incentives

In the UK most current accounts are free but come with hefty changes for things like exceeding overdraft limits.

In a way that’s understandable; rules have to be enforced somehow and charging customers sends a clear message that most customers will understand.

But it also creates an incentive for banks to be uncommunicative because customers who aren’t on top of their financial circumstances, and who aren’t in possession of the most salient information at the most impactful moments, are likely to make mistakes.

For some modern banks misfortune has become a revenue stream – one that’s working against the best interests of customers and, I would argue, the long-term best interests of the banks themselves.

That source of income doesn’t exist in our back-to-basics bank remember and it’s another reason why focusing on what a bank is, at its core, might help us cut through the stuff and nonsense to create something really great for customers.

Getting the basics right

For a bank determined to get the basics right the digital channel is essential. Mobile offers a way for customers to stay in constant contact with the world and the web is platform where they’re comfortable getting things done.

Understanding what users want and telling them what they need to know at the time they need to know it, requires both.

Here’s my wish list for a back-to-basics bank that’s bang up-to-date:

  • If my bank creates a current or savings account with a better interest rate, or if my interest rate is going to go down, I want to know about it in advance and I want to be able to switch instantly with the touch of a button.
  • If I am ‘lucky’ enough for my bank to pay interest up to a maximum balance on my account allow me to automatically transfer 
  • If my balance drops below what the bank knows I pay out regularly before I get paid warn me and allow me to switch funds from other account easily.
  • I want to set a minimum balance on my account and when my balance drops below that I want to know right away so I can act right away or preferable have an automatic sweep from a savings account to top up.
  • If it looks like I’m going to suffer a penalty or break a rule I’d like to know in advance and, if that’s not possible, then I’d like the choice to ‘undo’ my last action and avoid it.

How easy is it to do that at your bank?

 

Image © flydragon, via Fotolia (File #55331581)