Have you ever felt that there is a lack of love in banking? That something is missing in your relationship with your bank? Bureaucratic red tape evidenced by painful stacks of forms that need to be completed, hidden fees, not to mention the lack of ease in making transfers where, when and how you want to, just make the relationship a burden. I recently questioned my bank about the fees they were charging me and was able to have them reversed, reduced and simplified. Just like the cable companies that change your package when you bother to call and complain. Why did I, the customer, have to ensure that I “came first”? Then there are those introductory rates that jump up a few months after you get a credit card, but you somehow forget that this is going to happen, just as the issuer is counting on. Sounds like an abuse of trust. Product offerings have somehow made banking as complicated as the income tax act. It is time to bring simple back so we can love again.
Return to love, really?
Were we ever really “in love” with banks?
My earliest memory of banks was watching my grandparents feel like “family” when they “visited” their local bank branch. It was an outing they dressed for and when they arrived they were made to feel important. However, they still kept money hidden in the crawl space of their home. I recall finding a sock full of rotting $100 bills because although they loved their bank, they still remembered the bank crisis of the 1920’s and trust was definitely missing in this relationship. So, was it truly love?
More recently, the 2008 banking crisis significantly eroded the trust we have in banks. As stories later leaked about bank employees relentlessly pushing product at clients for the sake of bonuses, many felt like their banks were simply criminal. While banks have made strides to regain trust in this relationship, much more must be done.
It’s a morphing relationship
With the advent of mobile banking, visits to branches have plummeted and many brick and mortar branches have closed. No longer are we obliged to feel sole loyalty to one bank. We use this app for one thing, that app for another. Digital Banking is making its’ presence felt but there is a lot more change on the horizon.
The future of banking includes love
Banks are not going away. We need banks to store value, finance and enable transactions. But these institutions need to evolve to return trust to their relationships with their clients. After extensive research and some personal speculation, I have compiled the following list (not comprehensive) to describe how in the future, banks will bring the love back.
In the future, there aren’t any bank branches as we currently know them. The number of “branches” will be significantly reduced. Those remaining will be places where groups gather to learn about finance, have coffee, conduct business or just hang out. “Community rooms” giraffe calls them. People will identify their bank as a service provider and go-between with other providers. “Tell me who you bank with, and I’ll tell you who you are”.
Advanced security will include retina, biometrics or voice identification, which is much more secure than very hackable passwords and security questions that we use today. Your bank may subcontract this security out to focus on offerings that they make great money at.
With the wide acceptance of open banking API’s, your bank will allow you to aggregate and follow all of your financial activity in one place. An understanding of your personal net worth, basic financial concepts and terms will be common because your bank will guide you through the process, allow access to financial tools that support financial planning and more.
Your bank will offer products that truly suit you, including credit cards in colours of your choice and a mortgage that you design. They will streamline product offerings to those 20% of their current offerings that make them 80% of their profits. Your snapshot on the screen is “your bank”. The bank of you. Completely individualized, choose your colour, your logo and more. With services and accounts from various providers, often providers who offer only one service type and are the best in class. For example, you may use a micro saving app, like acorns or mylo. You might use a roboadviser for investing, and a traditional bank for monthly expense payments. However, it is likely that banks in the future will be sure to offer their own wealth management services due to the profitability in this line of business.
Partnerships with low cost providers
For the client needs that banks cannot satisfy they will partner with other providers, comparing and selecting services to suggest the best options to you. You will feel embraced and protected as service providers are vetted.
Bank partnerships might involve sharing the cost of customer authentication, fraud checking, payment processing, KYC and basic account information. As banks streamline and simplify their platforms and offerings, the subcontracting of support systems for these tasks will increase. This will support the future bank’s need to be agile and open.
The advent of AI and ML will allow banks to monitor your behaviours and analyze them, allowing them to make increasingly targeted offerings. Banks will also use AI and ML to predict future behaviours to become your proactive partner in your financial health via the creation of sophisticated customer profiles. Much like music apps track your listening and download habits to suggest songs and artists, banks will subtly track your financial life. Banks will warn you of payments due, of goals being shattered, overspending, etc. All with a desire to support YOU in your reach for financial health. These services will go a long way in creating a tangible emotional connection between you and your bank. Live brand experience, acceptance of feedback and instant response will go even farther.
Banks will have figured out your banking needs and offer the path to transaction completion that you demand. As friction is eliminated in the process your experiences will become more connected. You will be better served at each touch point in the customer journey.
Transparent and ethical
The software behind the build will be completely unbiased in its suggestions of product choices for you, and completely transparent, disclosing fees and revenue shares to the financial consolidating platform, if any.
You can scenario test different decisions, economic environments and more. You can find out when you will be able to retire with any strategy you implement. Products and goals are suggested for you with explanations on how these will help you, or you can select your own. Goals are then supported by notifications of ways that you to achieve these goals, how close you are and awards for getting there.
Anonymous product bidding
You will be able anonymously put your product, say mortgage, requests out for bid and connect only upon your selection of the right provider. You are no longer the taker of what is offered. You will have more power.
North American strides to the future
There are few financial institutions that are already making strides toward the future. Here are a few examples:
South of the border
Citizen’s Bank continues to develop digital including peer-to-peer (P2P), robo investment advisory, digital small lending and an entirely digital savings bank called Citizens Access. Citizens is working with fintech partners, developing its own solutions and sponsoring hackathons.
In Europe, N26 has launched with a few simple banking products that support banking without hastles. They are coming to the United States. Watch for it.
North of the border
ATB, an Alberta, Canada based credit union, announced that it will soon roll out BrightSide, their own digital bank. ATB describes this as a platform that will deliver easy, simple and fun experiences for people, and work to meet people exactly where they are in life. ATB currently has a tagline “All in. No bull” for their no-fee-all-digital account where you can bank, borrow and save all in one account.
How could you not love this?
A future bank has your back at all times and embraces you, entirely. You are respected in this relationship. You are not nickel and dimed, nor violated by absurd fees. Your bank utilizes data to ensure that you are offered the non-obtrusive high level personalized service you have come to expect in other services (travel, music). The relationship is “simply perfect” for you and your needs. You always know where you stand. Your bank supports you with safe connections to others that you also need in your financial life. Your identity is protected beyond cheesy passwords and security questions. You will feel loved and love it.
Share your #banklove story If you have experienced some #banklove let us know how that looks.