The virtues of digital : creating a truly digital bank
Do you remember when you first saw a newspaper app on an iPad? It was as though a physical newspaper had been trapped under the black glass. There was even a page turning animation that you probably showed your friends. It was magical. It was digitised news. Ditto for buying albums on iTunes and ordering a traditional taxi; amazing experiences, but we just took what had come before and translated it directly to the new medium.
Marshall McLuhan, the guy who in the 1960s said ‘the medium is the message’ also said ‘New media are new archetypes, at first disguised as degradations of older media’. And this is what we’ve been working through industry by industry for the past decade.
From Uber to Buzzfeed, Spotify and Netflix, we’ve been finding the new paradigms that best fit digital capabilities to replace and disrupt the digitised analogue products and services that came before.
Banking is no exception to this rule. We’ve moved from a passbook to a printed statement that was first mailed to us, then put on a PC screen and eventually shrunk to your phone. Digitised banking - tick! Truly digital banking - we haven’t seen it yet!
When I co-founded Monzo, a new digital challenger bank in the UK, that was the challenge that faced me. As Chief Customer Officer I led product and proposition, and I knew that I didn’t want to just digitise banking, I wanted to find the new paradigm, an approach that delivered digital banking rather than just digitising what had come before.
I didn’t want to just digitise banking, I wanted to find the new paradigm, an approach that delivered digital banking rather than just digitising what had come before.
So what are the virtues of digital that make it different? What are the differences that make something a truly digital service as opposed to just a digitised product?
I’ve been working on this for a while, and I recently came up with a mnemonic that I’ve been using when working on new digital propositions with banking clients for 11:FS .
Truly digital propositions are:
The processing time for a cheque in the UK was based on how long it took a fast horse to travel from Scotland to the other end of the country ~3 days.Today signals can travel the the globe in milliseconds. This doesn’t just create a faster horse, but provides a way to actually influence and inform customer behaviour through positive and negative feedback. No longer do you have to keep mental track of various accounts and reconcile later. You can receive instant feedback, offers, rewards, and actionable insights
The best selling super-computer of the 1990’s - a Cray II supercomputer could process 1.5 Giga-flops per second of computations. Impressive, until you realise that is equivalent to an iPad 2. In fact the iPad 2 would have been one of the top 250 super computers in the world until 1994! We are literally carrying around super-computers connected by near ubiquitous networks to vast data centres that can process transactions and data in the blink of an eye. How do we put that to work for customer benefit? It’s time to forget about financial products and get to delivering intelligent financial services.
Time, place, who you’re with and what you’re doing all provide contextual information that gives clues to what you might need next. Are you in the airport getting on a plane? Shall I activate some travel insurance for you sir? Are you getting a late train home - should I organise the usual taxi sir? You’re looking to transfer some money, is it the money you normally transfer to your joint account - Do you want me to automate that for you next month? Context is king, and creates real magic.
Unlike machine based experiences of the past, the best digital applications and experiences feel very human. Empathetic design, anticipating needs, tone of voice, and connection with real people, make it as far from an ATM experience as it could be. In effect for financial services we are building the equivalent of a virtual private banker for the mass market, and it should feel like that.
Banking experiences from the past are isolated, and isolating. Banks deliver their own products within the walled garden of their own branches, websites, apps, and phone lines, and try to convince customers to stay within the wall. Digital services can deliver end-to-end experiences through powerful APIs, curated marketplaces where the best of breed players offer their wares, and integrated platforms where integrated products and services solve a group of interelated problems.
We are a social species, yet traditionally banking has isolated our finances to a single person / single account. We live in families, groups, tribes, societies, we support each other, and we look to find our place in comparison to other people. Successful digital services make this easy.
We’ve only scratched the surface here. But I hope you see the difference between incremental development of digitised banking, and working back from the virtues of digital to create truly digital services - that deliver against deep customer needs.
Want to find out more?
If you’d like to know more about the 11:FS approach to proposition design, development, testing, and launch, if you’re a fintech superstar looking for your next big thing, or you just want to understand more about what we do at 11:FS team, follow me @jasonbates on Twitter, or drop me a line at firstname.lastname@example.org