The year is 2030 and I have a single app on my phone that allows me to access all my banking and financial needs, inclusive of differentiated offerings tailored to my individual needs.
While this might sound like wishful thinking, it’s a future that consumers are already demanding and financial service institutions (FSIs) have yet to rise to the challenge to secure a space on that single, all-inclusive app.
Achieving this requires a considerable shift in mindset for FSIs, away from the bottom line, and towards a multi-stakeholder approach that encompasses customer experience, sustainability, and their contribution to society.
In an industry marked by major disruption in the last eighteen months, traditional ways of operating no longer work and there are four key attributes FSIs must evolve towards, to meet the expectations of consumers in the next decade.
Focus on human-centred design
Developing products with customers in mind will ensure services are embedded in broader customer engagements and across their wider consumption needs. While this might sound obvious, it’s too often overlooked.
Consulting firm PwC suggests banks should be "invisible", automating products and services to ease the customer's financial journey. Homebuyers, for example, will only be recommended residential areas and homes that fall within their current and projected future mortgage limits based on their income history. The "invisible" bank also can negotiate the cost and payments to repair a malfunctioning car by contacting experts and validating the right amount will be charged. This can be further embedded with insurance and other deductibles.
Such service levels are only possible if banks start putting product design closer to the heart of what consumers need.
Eliminate payment friction
With payments an integral part of the customer journey, banks will need to tap automation and artificial intelligence (AI) to deliver payments in the most cost effective and efficient way, with seamless transition between different value systems such as fiat, blockchain, and loyalty applications.
UK fintech firm Revolut, for instance, uses Google Cloud to enable customers to easily access their money in more than 150 currencies and withdraw money at the same exchange rates as banks, while maintaining fees at a minimum. Handling more than 230 million transactions for a global customer base of 3 million, it is able to scale up quickly and cost efficiently with Google Cloud’s cloud platform, automating updates and maintenance as much as possible.
Develop 'trust as a service'
Financial services providers face a trust issue with consumers who may trust these companies not to lose their money, but are more hesitant about sharing personal information.
If banks are able to plug this hole, they will be able to significantly improve service quality. For instance, having access to updated information on monthly income or repayment profile, will allow banks to build a dynamic credit score, powered by AI, that lets consumers apply for a loan and access any credit service, anytime, whether it is a home loan or microloan.
The more data consumers trust FSIs with, the better products can be customised based on enhanced knowledge of every customer's risk profile and appetite. They also can identify new customer segments and potential new products by gaining a better understanding of customer patterns, preferences, and behaviors.
Differentiate with specialised offerings
In 2030, FSIs are unlikely to own technology infrastructure and will instead leverage cloud providers to manage all technology components, allowing the FSIs themselves to develop specialised financial services.
This will pave the way for customers to create a "financial service provider of one", where various services are pulled from multiple providers to fulfill the customer’s individual needs, accessible via a single, aggregated platform. Gone will be the days where consumers need multiple, separate apps to access services from the different providers.
For example, Macquarie Bank is prioritising its capability to connect to various platforms with a digital, responsive, technology-agnostic platform. By enhancing platform architecture, the group extends its capability in the future by creating more human experiences with technology that go beyond just banking.
Much like the one super app that delivers all their financial requirements, this kind of aggregated platform will address customer demand for simple, intelligent financial services that meet each unique "moment" of their life journey.
To reach this 2030 future, FSIs must start putting consumers in the center of their product development and align their service offerings and other associated transactions to each customer experience.