It's Time to Reinvent Mobile Banking

MOBILE STRATEGIES

It's time to shut down the mobile banking operations at most banks. I say this after watching the development of mobile banking sites worldwide and realizing that most traditional banks don't understand the needs of the consumers they serve or the competition they face.

Mobile banking should not be a delivery channel for branch-based banking. It should be a contextual experience, with a clean design, simple interface and engaging platform to manage money. Unfortunately, most mobile banking sites look like miniaturized online banking websites. This is a problem as we try to serve Customer 3.0.

Last week, AXA Banque in France launched a new 'mobile-first' offering called Soon (website translated to English). Similar to other pure-play mobile banks worldwide like Moven, Simple, GoBank, Fidor, Hello, etc., Soon was initially introduced using a registration/invite model to allow for orderly scalability. Not a bank as such, Soon is a set of services accessible via a mobile application and backed by AXA Bank.

In an exclusive interview with Raphaël Krivine, head of direct banking for AXA Banque, "We started to engage with users in mid-2013, presenting the concept of the offer and the main functionalities to get feedback and comments (especially via our introduction video). It was very useful for us to validate the overall concept and to finalize developments in the right direction." He continued, "The offer is now available for the people who registered last year as a way to thank them for having been supportive from the very beginning.

Unlike virtually all traditional mobile banking sites, Soon (and the neo-banks mentioned above) rethinks the way mobile banking is done by designing a bank for the smartphone as opposed to simply providing access to banking products through a mobile device. This was done at AXA by creating an entirely different brand and mobile platform within the bank. This allowed for an alternative digital infrastructure, a lean start-up mode, open architecture and the ability to view banking from the customer's (as opposed to the bank's) perspective.

With a significantly lower cost structure, the emergence of pure-play mobile banks feels like a similar trend in the 1990s when direct online banks were in vogue. Some of these banks still exist such as First Direct and ING overseas and Capital One 360 (originally ING Direct US), USAA, Ally and Discover Bank in the U.S.

While many traditional banks have imitated some of the direct bank advantages, deposits at the top four direct banks have grown at three times the industry average according to TNS Global. Interestingly, while once having a pricing advantage compared to traditional banks, consumers also rate these direct organizations as 'more convenient' than traditional bricks and mortar banks.

The question is, will traditional banks ever fully embrace the process of managing money through mobile as opposed to simply providing mobile access to accounts? Will they lose the 'convenience advantage' with the mobile channel also?

The Soon Difference

As with other pure-play mobile banks, Soon provides an entirely different user experience than traditional mobile banking. You can see it immediately in the simplicity of the design, the ease of interaction and the approach of the application. In fact, you can see it on the mobile banking sign-in page where the interaction is personalized (can even be seen in the French version).

"Soon has got the same mindset as Moven, GoBank or Simple because it aims to totally change the way to do banking, with a strong focus on UX," said Krivine in our interview. "Unlike some of the new mobile banks in the U.S., however, Soon is launched by an existing bank, with the strength of existing business processes and potential access to our wide range of products (i.e loans, mortgage)."

Comparison between sign-in page of Soon and Wells Fargo

Opening an account is as simple as snapping a picture. No more long forms or extended account opening process. With Soon, a new customer simply takes a picture of their identification, proof of residence (a bill sent to their home) and a evidentiary signature and the account is opened. Opening of associated savings account and a credit card is just as easy.

Once an account is opened, the experience leverages many of the unique benefits of a pure-play mobile application. If the customer wants to save for a project or future expenditure, Soon uses a 'nudge' behavioral science approach, which encourages a customer to behave responsibly with encouragement provided along the way. Not only does the application help a customer save, but it looks at future planned expenses and upcoming revenue to determine if a current purchase should be made.

The dynamic vision of providing a projection of purchasing power in real time is similar to the GoBank 'fortune teller' and Simple's Safe-to-Spend features and very unlike a traditional mobile banking application that simply shows balances based on cleared items. An analogy would be the difference between looking out a front window to the future as opposed to the rearview mirror.

As opposed to simply a current balance, Soon provides a Safe-to-Spend value

Each transaction or project can be associated with a document or an image for better record-keeping and security. The simplicity of using the photo capability on a mobile phone adds to the convenience. Moreover, each purchase can also be associated with a comment, geolocation or even a 'mood' (smiley face or frown). Unlike many mobile banking applications, the Soon mobile app allows a customer to find previous expenses using natural language search.

Transactions can be associated with pictures, comments and even emotions

Similar to Bluebird from American Express, Soon provides its customers with both a checkbook and Visa card (debit) with an NFC functionality. P2P transfers between individuals can be done via PayPal automatically within the application for ease of payment (a partnership avoided by almost all U.S. banks).

P2P is made easy with the PayPal integration

Customer support is one area I believe Soon falls a bit short from a mobile app perspective. Soon will provide support via advisors 24/6 by chat and 24/7 by email, but will not support calls or live chat (like Amazon's Mayday).

Mobile-First Target Audience

As with most pure-play mobile banks, Soon is targeting smartphone users, (which is to say nearly everybody as the smartphone market continues to expand rapidly). There may be a challenge for Soon, however, since recent research suggests that the French seem to still be attached to the proximity of their physical bank, even if the general craze for online and mobile seems to increase.

The benefit of being a division of AXA is clear in the Soon offer. "We expect our first customers to be among the digital natives, because they are used to do anything with their smartphone, including banking," stated Krivine. "Nevertheless, we know that especially for the young people, it is very important to receive advice and support (for instance for loans), so Soon customers will benefit from the expertise of AXA branches (our core business model relies on insurance tied agents that choose to diversify their business with banking in order to develop customer loyalty). This is a fall-back option, but customers will have an option to go to a branch (using Soon apps that will integrate geolocalisation to find an agent)."

Soon - English subtitles from Soon on Vimeo.

The Reinvention of Mobile Banking

Customer's behaviors are changing as they become more comfortable with the web and mobile devices. They are looking for simplicity, availability, real-time insight, contextual engagement and the ability to leverage social networks and enjoy gamification. They expect far greater transparency with the type of personalization they receive as they interact with other industries.

Smartphones provide the technology and contextualization never before available. These devices open the door to a completely new way to manage money on the go. Instead of providing mobile access to an array of branch-based banking services, there is the potential to provide advice and real-time financial insight.

Soon is not the first, but it is the latest in a string of mobile banking offerings where the design, functionality and customer experience is central to the offering. The question is whether traditional banks globally will embrace the potential of the mobile device to deliver much more than just balances and a narrow span of capabilities.

Best selling author, speaker and founder of Moven, Brett King wonders if traditional banks can meet this challenge. "US Banks are avoiding the digital trend worryingly. We have the BIG banks who are too big and too fragmented to come up with a pure-play digital brand that might cannibalize their main brands. We have regional players who are too traditional in their approach. And we have smaller players who might be too small to think they can do this." "The U.S. right now is really slipping behind the Asia Pacific region and much of the rest of the world in terms of industry-wide innovation."

With regard to the introduction of another mobile-first offering, King adds, "It is great to see that organizations like AXA are embracing digital engagement of customers. I think Soon is another great example of why simple, easy to use user experience is still a strong differentiator in retail banking today. While some might think that Soon.fr is a competitor to Moven, the reality is that we are part of an exclusive new club of disruptors creating an entirely new category of banking experience. We stick together, because it is the other banks who still insist on account opening in a branch, or think that mobile is about putting internet banking on a smaller screen who are the guys we're trying to unseat."

Marketing Opportunity

Marketing needs a seat at the mobile banking design table. You need to have input as to whether your organization is going to continue to deliver mobile banking as an access tool or a money management tool. 

In the meantime, it is marketing's responsibility to promote mobile banking sign-up and usage whenever (and wherever) possible. Mobile banking customers are more engaged, own more services and are more loyal than customers without mobile banking.

Additional Resources

Direct Banks and the Future of Consumer Banking - TNS Global (Apr. 2013)

Banking in a Digital World - AT Kearney (Aug 2013)

Simplicity In Banking Is Anything But Simple

CUSTOMER EXPERIENCE

It's time to build your simplicity capability.

Financial institutions are starting to realize that simplicity does not only improve the customer experience, resulting in trust and loyalty, but also reduces operational costs from redundant products, processes and dealing with customer complaints.

By Jin Zwicky, VP Experience Design, OCBC Bank, Singapore

How can banks achieve simplicity?

We can find great lessons from smart banking alternatives such as Simple, Moven, GoBank and Bluebird. What is less discussed is how to achieve simplicity in traditional banks that deal with a legacy of old processes, infrastructure and often don’t have luxury of starting afresh. Translating the big intent to achieve simplicity into realization is not easy.

The good news is that realizing simplicity is possible in any bank. As a design practitioner in one of the largest banks in Singapore, I’ve been leading a broad range of ‘Simplicity’ initiatives in the bank, such as website design, mobile banking, advisory tools, investment product communications as well as redesigning physical spaces. All of these initiatives have reaped measurable success in bottom line results and operational efficiency.

We saw double-digit increases in sales in investment and insurance products when we simplified the communications material. We saw 100% adoption rate in using the digital needs analysis tool in our top branches after we simplified the tool. We increased customers’ satisfaction in our account opening experience by simplifying the system. Finally, our simplified website was not only listed as The More Gorgeous and Simple Banking Website, but also we could save about 0.5 million dollars per year by reducing the number of pages in the website.

From years of my simplicity journey, I came to believe that ‘simplicity’ is not just a project. It is not just a team of simplicity specialists. It is a capability that we have to cultivate! Furthermore, it is an organizational culture that we have to create in order to achieve simplicity.

I came up with the following framework to illustrate this point.

Simplicity Resources

Most banks understand the importance of simplicity, and have programs or projects to execute simplicity whether it is with customer touch points or internal processes or systems. This requires gathering resources such as a team of specialists / designers to deliver the project.

Simplicity Capabilities 

However achieving simplicity is not done, unless the organization builds a strong foundation to make simplicity sustainable. After all the hard work, it is also prone to be eroded by the flood of complexity over time, as living things are bound to become complex. It is more so in the banking industry due to changes in legislation, compliance requirements as well as technology. Simplicity is hard to achieve.

Simplicity capability means the ability of bankers to understand and make decisions that achieve simplicity. Bankers can learn key simplicity skills, just as they learn communication or management skills. How simple would the online banking experience be if the project team in your bank understood the power of effective visual design? How confident would a customer feel in buying an investment product if bankers were dedicated to write the communication clearly without any banking jargon? When more bankers are equipped with those knowledge or skills, this became your organizational capability to achieve and sustain simplicity. I suggest the 3 most fundamental steps to cultivate the simplicity capability.

1. Understand definition of simplicity in banking
2. Increase design sensitivity
3. Master user-centered design process

Simplicity as a Bank's Capability _JinZwicky_nov21_2013 from Jin Zwicky

Definition of Simplicity in Banking

Based on my research on simplicity, the most fundamental definition of simplicity for banking industry is this: “Simplicity is based on human nature and common sense.” I illustrated this definition as following.

The pink circle signified one’s mental model, red circle signifies the knowledge required to understand something. The bigger the overlap is the simpler people perceive. That’s the nature of simplicity. This means banks must understand customers’ mental model first. This means banks must design the experience closer to their mental model. Understanding this definition gives valuable clues to embarking on a simplicity journey in your bank.

Increase Design Sensitivity

Design is a noun - 'the look and feel of a final object'. Often bankers think a great look and feel is nice to have. When it comes to simplicity, it is not true - the look is the message itself. The look matters because it is not only what is there to read / understand, but also what you take - a feeling of confidence and a feeling of trust. This is how your mobile banking looks, and how easy customers feel when they use it. This is how product communications material look, and how confident customers feel about them.

Therefore, how to assess a good visual design is a critical capability for banks. Design is too important to leave only at the hands of external experts. It is everyone's job to appreciate, care and obsess with the value of design to the business.

Master User-Centered Design Process

Design is also a verb. Design as a verb means 'the process of creating the object or experience'. Here, the important point is that the quality of the process has a direct impact on the quality of the output. In fact, great design is an outcome of the right design process. Banks’ design crimes such as complex product fact sheets and a complex banking system are the direct result of a bad design process.

Then what is the right design process in achieving simplicity? The definition of simplicity gives the answer - it is to understand customers’ mental model and design backwards to close on their mental model. This is why a ‘user-centered design process’ is key in achieving simplicity. User-centred design process largely consists of three stages:

Understand Customers - Prototype - Test

While the illustration looks like a straight line process, this is by no means linear in reality. The key here is the ‘iteration’ until we reach simplicity. This sounds so common sense, but it's often not commonly practiced in banks. Establishing the user-centered process in everything you do is the heart that pumps out simplicity throughout your organization.

OCBC Bank in Singapore started teaching 'design' to product managers in the bank. They learn the importance of design process and how to apply simplicity thinking in their projects. They learn the basics of visual design to better appreciate and assess effective design solutions. They learn how to write a clear communication that speaks human, not that speaks bank. When these learnings and skills are cultivated as your organizational capability, your bank is building a stronger ground to fight against complexity and be more competitive in the market.

Simplicity Culture

The highest business impact can be achieved by cultivating ‘simplicity as culture’. To ignite the simplicity culture, ‘The law of conservation of mass’ sets the scene.

‘The law of conservation of mass’ is a theory in physics, which states that the mass of the system must remain constant over time, as system mass cannot change quantity if it is not added or removed.

Apply this theory by replace the word ‘system’ with ‘pain’. The mass of pain - bad customer experiences in banking such as complexity in communications, hard to use touch points - will remain constant, the quantity cannot be added or removed. This means the amount of pain will be there. It’s either for the bank to absorb, or for the customer to absorb. The more pain you absorb, the less pain there is left for the customer. There is no magic like removing the pain. Customer pain is in inverse proportion to the pain companies go through when designing customer experience. How much work do you put into the design process to absorb as much as pain as possible for your customer?

Acknowledging the amount of work to achieve simplicity, and willingness to absorb the pain to deliver simple customer experience...this is the mindset banks need to cultivate as the organizational culture.

As the headline to this posts say, simplicity in banking is anything but simple. We need intelligence from experts, but that is not enough. It requires your organization’s discipline and dedication and internal intelligence in cutting through complexity.

Take a step to cultivate simplicity as your organisational capability and culture. Understand the definitions of simplicity. Teach your bankers design as a noun and as a verb. Absorb customers’ pain. 

The rewards are real.

JinZwicky OCBC from NextBank on Vimeo.

About the Author

Jin Zwicky is the vice president, Experience Design, Group Customer Experience for OCBC Bank. She lead the bank's top priority customer experience design initiatives for retail, premier and private banking businesses. In her role, she establishes customer-centric design processes and fosters customer-centric organizational culture, cultivating 'Simplicity' as the organizational capability through training bankers and product managers. She also is the author/publisher of her own blog, Designful Co.

Additional Resources

Designful Co. : Simplicity and Beauty for Financial Services - Blog by Jin Zwicky

Global Brand Simplicity Index: 2013 - Siegel and Gale