Author: Jerry Mulle
I was recently asked whether I think that customers’ expectations of banking technology are surpassing the actual capabilities of the technology?
The simple answer is that customer expections of technology are set by the technology they’re already familiar with, rather than the other way around.
Modern service businesses like banking need to work hard to stay in step with their customers so it’s critically important that they listen to what people are saying.
Customers are most likely to comment on and describe what they already have, as noted by innovators from Henry Ford (“If I had asked people what they wanted, they would have said faster horses”) to Steve Jobs (“A lot of times, people don’t know what they want until you show it to them.”)
However, it’s important to understand that in future customer expectations for banking may be set by technology from a completely different field.
iPhones opened our eyes to how poor some business applications were
For example, when iPhones first emerged corporate IT departments suddenly noticed that sales people and executives were no longer happy with the (admittedly often appalling) rudementary interfaces of internal company systems.
Boring-but-necessary applications like intranets and inventory management systems were often expensive and poorly finished.
The iPhone was beautiful, integrated, intuitive, came with a trove of cheap, useful software and was useful and usable in the office environment.
Almost overnight the iPhone reset working peoples’ expectations of what was possible and what they had a right to expect from their business software. It may not have been a reasonable expectation but it was nonetheless a very real one and IT departments were left to square the circle.
Disruptive technology and banking customer expectations
The emergence of Apple’s flagship phone shows us that innovation in one area of technology can change peoples’ expectations quickly and fundamentally, even in apparently unrelated areas.
To avoid unpleasant surprises banks will need to keep a watchful eye on technologies with no obvious application in financial services.
For example, the way that modern teenagers use technology hasn’t stood still. Young people are turning their back on email, SMS messaging and even Facebook (which is something their parents and teachers use).
The people looking for bank accounts, savings, pensions and mortgages in the next decade are currently chatting over proprietary messaging apps like WhatsApp and communicating via annotated images and videos on Imgur, Vine and Snapchat.
That is their landscape and it will need to be their banks’ landscape too.
That landscape has already begun to shift thanks to a first generation of disruptive financial technologies finding a home in the mainstream like Bitcoin, P2P lending and SMS payments. Tellingly, these diverse technologies challenge the norms of security, convenience and cost, and didn’t emerge from the financial services sector.
The Silicon Valley mantra is ‘release early, release often’ – a software development philosophy that accepts mistakes (if quickly corrected) as a price worth paying for increased innovation, agility and customer focus.
Financial institutions are used to operating in an environment that demands the highest standards of security and regulatory compliance rather than velocity and agility. That envrionment is a bulwark for our collective safety but it can breed a culture that rewards overly-cautious, risk averse behaviour – the very opposite of what will be required to meet customer expectations in the long term.
Delivering security and innovation quickly isn’t impossible but it’s considerably more difficult than delivering either one individually and it doesn’t happen by accident.
Banks as centres of innovation
To develop technology that can keep pace with their customers banks will need a culture that’s fit-for-purpose and challenges not only what they produce and how they produce it.
They will also need to get better at listening to customers and their experiences with technology from other fields, and get better at being fast to market by finding, creating, partnering with or buying disruptive technology.
The public are using all kinds of devices, apps and websites and that technology is what sets their expecations for banking technology.
The good news is that customer expectations aren’t plucked from thin air and the next generation of technology that will keep customers loyal and engaged is probably already out there, somewhere.