Progress in the banking industry may be perceived  in terms of progressive technological complexity, but stripped-down digital interaction is the future 

PLAYING games on a smartphone and online banking do not, at first glance, appear to have much in common.

Yet developments in the former can teach valuable lessons in the way banks can interact with their customers online.

At the moment, while some customers are adept at using mobile banking, many others find it a frustrating and complex interaction.

Despite modern changes to the digital banking channels and increasingly sophisticated technology, most bank customers’ digital experience has remained unchanged even though banks traditionally segment their customers by income levels and create propositions for each category. 

Regardless of customer segment, from students to pensioners, and from the self-employed to big businesses, the internet and mobile banking experiences are exactly the same.

In a recent research study from comScore, customers were classified according to the amount of time they spent on digital banking channels. 

HeraldScotland:

ENGAGING USERS: CGI’s Business Consulting Director Marcus Martinez.

 

The study found that “light” users constituted 50% of the online banking audience, spending just 7% of their phone time on banking sites and apps, while “heavy” users constituted just 20% of the online banking audience, spending 71% of their phone time on banking sites and apps.

Mobile gaming companies adapted their gaming apps to attract customers who wanted to play games on their phones but were becoming fed up with ever more sophisticated games that offered so many features they gave up after just a few minutes – thus affecting the gaming companies’ revenues.

“To attract these ‘time-poor’ users, mobile gaming companies created a new category called ‘hyper-casual’ games,” explained CGI director Marcus Martinez. “As the name suggests, they are lightweight games with a very simple mechanics. Literally ‘tap to play’. 

“Because of their fundamental simplicity, hyper-casual games are not only instantly playable but also highly addictive; this combination of simple mechanics with minimalistic user interface design provides a very accessible and engaging user experience.

“It is an excellent example of an industry that has reconsidered how to attract disengaged customers and, as a result, has simplified its products to create a much better customer experience.”

Some very popular platforms have adopted this concept, launching simpler versions of their apps.

Interestingly, that is also the path being followed by most challenger banks too. 

These companies managed the transition by investing in interface design and creating a business model based on Open APIs (Application Programming Interfaces) and microservices.

“This is not just a user-interface design trend, but the result of a shift toward customer-centric technology strategy that is based on a modular and more flexible model enabled by the new open banking standard,” said Marcus.

“APIs are almost like a power socket where on one side you have the electrical power and on the other side you have the equipment, like a hair dryer for example. 

“The power socket is product agnostic and allows the hairdryer (or any other product with a power plug) to use the electricity and it is the same concept for software.”

For example, traditionally if a bank wanted to find out if a customer could afford a credit card, it would invest internal resources to draw up a complicated affordability model based on that customer’s financial life to see if they were likely to default on payments. 

This was time consuming and needed an army of people to analyse the data manually, or with very limited automation, but now it can be done via an API.

“Banks don’t need more people or even develop their own solutions, they just need access to an external piece of code through an API, and that’s a fundamental shift,” said Marcus. 

Most large banks in the UK have now joined the open banking ecosystem which opens up access to their customer data to third parties. 

According to Marcus, organisations wanting to be in a position to compete in this new digital ecosystem, should consider how to engage different types of customers and adapt their digital channels accordingly. 

“The building blocks of the open banking standard allow banks to assemble digital experiences in line with customer’s expectations,” he said. 

“One mobile channel does not fit all. Wherever banks are in their open banking journey, it is worth them considering the business opportunity that comes from serving hyper-casual customers differently. 

“An API driven solution like CGI’s Open Finance will help organisations to accomplish this change in the most cost-effective way.”

 

 

Open Banking is a ‘game-changer’

Industry developments  may redefine relationships between customers, businesses and banks

CGI director Marcus Martinez became all too aware of the need to simplify people’s experience of online banking when his own bank redesigned its website. “Before it went live they sent me several messages saying it was coming and would make my life easier but when they launched it was worse than previous versions and I was lost,” he said

“I wanted to make a payment and was really frustrated. The new website was put across as something really fresh but it was actually more confusing and I got similar comments from other people using other banks.”

He realised there was an opportunity for banks to think about what really matters to customers.

“Regardless of income level everybody sees the same interface so maybe there is a need to develop a channel that is simpler,” said Marcus. 

HeraldScotland:

DIGITAL SIMPLICITY: CGI’s Open Finance technology can help banks to tailor their digital channels to their customers’ lifestyles.

“For example, a student who has never had a bank account does not require such a complicated website when they are just starting their financial life.

“I realised there was maybe a need for banks to tailor their digital channels towards these different types of customers.”

He wondered why banks did not follow the example of companies such as Facebook which have developed a slimmed down app called Facebook Lite.

“Why do banks stick with an app with thousands of things we rarely use?  Today all the tools and market conditions exist to provide a better kind of service but most of them don’t do it. One of the things we assume is that everybody is digital but a large part of the population does not see the benefit and there is a risk of exclusion which will be quite important in future,” said Marcus.

“I think there is a huge responsibility on the part of banks to provide a digital experience aligned with their customers’ lifestyle and context, in plain English, removing the financial jargon and also providing educational materials for people to learn more about these things.

“Despite all these business and technology challenges, Open Banking is game changing for the industry,” he concluded.