Banking is not just about money.
According to Lorenz Jüngling from The Isle Ventures, it is also about users and, most importantly, their emotions. And, as Danske Bank’s Guri Hanstvedt commented, the power of emotions should not be underestimated.
Challenger banks and fintechs understand this instinctively. Their products are designed around user experience, are highly functional and community-minded. For incumbent banks, however, adapting to the rise of ‘emotional banking’ requires more of a step change. Mobey Day Vienna gave attendees a chance to lift the lid on this emerging trend, and gain insight into the strategies and approaches that are making it happen.
From payments to lifestyle
To resonate with customers on an emotional level, banks should avoid overcomplicating things.
Xiaoqiong Hu from Alipay explained that it was the simplicity and elegance of the Alipay platform, together with its ability to solve everyday problems, that has elevated it from payment method to cultural phenomenon. It has over 870 million active members – more than the population of the whole of Europe. And during Double 11 (China’s busiest shopping day) in 2018, it handled 1.7 billion transactions per second.
These characteristics, added Karin Van Hoecke from KBC, underpin any successful solution. Banks need to ’get comfortable with being uncomfortable’ and actively seek out these problems so it can address them on their customers’ behalf. For example, millennials weren’t using traditional mobile banking apps, which were deemed clunky and unfamiliar. The solution? A dedicated platform that resembled popular messaging apps to drive engagement.
Klarna’s Robert Buenick agreed. He highlighted that consumers are on average busier and more stressed than before, so solutions that enable them to claw back both control and time are invaluable. For example, the overall online buying experience can be enhanced significantly by making it easier to shop online, manage spending and cashflow, tailor shipping, track delivery and expedite returns.
Living in a material world
The prevalence of digital services means the role of the branch is diminishing in everyday banking. The importance of a physical presence remains, however, as banks aim to forge meaningful connections with their customers.
For example, Erste Group has created its Financial Life Park, an exhibition which provides financial management education for children and young adults through interactive experiences and guided learning. In a similar vein, ImaginBank’s Jordi Guaus introduced the imagin café – a collaborative cultural space, which doesn’t sell any banking services at all. This isn’t the important part, he says; after all, Red Bull’s website doesn’t sell the energy drink. Rather, it sells an adventurous outdoor lifestyle that has become synonymous with the brand.
For banks, physical experiences and locations are key to turning customers into fans. In the highly-competitive open-banking ecosystem, enthusiastic brand advocacy will be a key differentiator.
Synthetic data for real results
An interesting challenge facing financial services is the increasing use of AI to enable the delivery of personalised services.
The key to making AI successful is to ensure it works for both the consumer and the bank. Rabobank’s Jan W Veldsink noted how personal assistants are increasing in both popularity and power, but suggested that it is the quality of interaction that is integral to creating trust between the assistant and the user.
Success here is hard won, however. Michael Platzier from Mostly AI argued that there is no industry more protective of customer data than that of financial services. This is a good thing, but when combined with stringent regulation such as GDPR, it does mean that data sharing can be restricted and innovation hampered as a result.
Yet with AI-generated synthetic data, advanced analytics and machine learning can be performed on datasets that are highly realistic and representative. This delivers powerful customer insight, without the regulatory headache.
As we approach 2019, it is tempting to focus on the coming year. But Mobey Day laid down a bigger challenge. Oracle’s Francis Mac Aonghus asked us to leap into the future, start with the needs of the customers in 2030 and then work our way backwards.
From the debates and discussion in Vienna, it’s clear that meeting the emotional needs of consumers will be fundamental to driving engagement in this increasingly disrupted ecosystem.
For incumbent banks, the cultural and operational shifts required to enable these kinds of strategies will be significant – but not insurmountable. Industry collaboration will continue to play a crucial role, for although no-one can predict the future, together we can find the stepping stones to find a better view.