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Beta Products , as well as Pilot Projects are necessary concepts when delivering new solutions . Reputation however will always remain a key element of retail banking . Can some software companies enrol instable , uncertain Beta solutions ? Yes . Can a major bank do so ? Obviously not . The Modern Retail Banker has to have a sense of ‘ customer readiness ’ and a conservative and cautious approach to enrolling new solutions .
Interest in Millennials : People becoming adults after the year 2000 are called ‘ Millennials ’. This growing customersegment differs from the previous core focus of all corporates worldwide : Baby Boomers – essentially the parents of Millennials . This new generation prefers tech companies over banks , uses smartphones instead of television , videos instead of texts . Millennials have a different relationship towards owning things ( they are much more open towards the so-called “ sharing economy ”, iconically represented by Uber and Airbnb ) and their entire financial life-cycle differs greatly from the pre-crisis norms set by their parents . They are digitally native , they prefer location-independent activities , yet , they are even more globalised and mobile than their parents .
Three things to watch about Millennials and banking :
– The GAFA Bank : Millennials are much more familiar with tech-companies than banks . There is a rumour that one ( or more ) of the US tech giants will take a serious endeavour into the world of financial services , i . e . start a major global consumer bank . This concept is nicknamed ‘ The GAFA Bank ’ after the four major US tech giants : Google , Apple , Facebook and Amazon . – Digital Identity : Countries are struggling with figuring out the concept of full official digital identity . Estonia is the best practice in implementing full digital identity , but others are significantly behind . For Millennials the lack of face-to-face administrative work is obvious , and it is highly painful ( actually some research , literally quantitatively , showed that it is perceived as more painful than going to the dentist ) to go to a branch and read and sign physical papers . As sovereign countries – in the coming decade – advance in creating and implementing full digital identity solutions , banks have to get ready to embrace serious online-only and smartphone-only regimes . – Smartphone Advertisements : for Millennials their smartphone is the primary window onto the outside world . Their smartphone is their TV , their newspaper , their fax , their torch , their phone , their encyclopedia , their calendar , their watch , their alarm clock , their photo-album , their photo -and video-camera and their map as well as more and more their credit-card . A significant chunk of life is getting transformed and saturated into this four-by-six inch piece of plastic and metal . Younger Millennials are hard to reach other than through their smartphones . Except for telecom companies and smartphone manufacturers – which have special access to and expertise in smartphones – only tech companies have the know-how for efficient communication through this channel . Banks – which want to survive – will soon have to figure out how to best advertise to this new generation .
Network-Readiness : Many fintech companies are excellent in embracing the opportunities and values the new network – solutions , the 21st Century Communities ( i . e . online communities ) require and represent . As opposed to techpeople and fintech companies , bankers and banks are much less excellent in recognising , understanding and embracing these new ‘ spaces ’ and tools .
Three key areas of Network-Readiness for the Modern Retail Banker :
– Social Media : Social Media has multiple key roles in modern retail banking , from the typically successful social media presence of fintech companies – and some banks – to the advertisement techniques best applicable in this new space of communication . One aspect I want to especially emphasise here is the ‘ brave new world ’ of Social Media Credit Scoring . Social Media Credit Scoring is a new , complementary tool in assessing client-risks . Companies like Friendly Score , Lenddo , BigDataScoring , HelloSoda and dozens of others can pull the information from anyone ’ s Facebook , Twitter and LinkedIn profile ( and connections , plus activity ) as well as from the browser-history and provide the person – giving permission for any of these companies to do so – within 30 seconds with a ‘ Social Media Credit Score ’. ‘ Social Media Credit Score ’ is often the primary basis of P2P lending decisions and more and more often a secondary tool for regular banks . – Crowdsourcing : Crowdsourcing is the process of getting ideas and all sorts of input materials from the online community . Nowadays serious books are written by the methodology of crowdsourcing , but this is something that some retail banks have started to apply with great success . Barclays crowdsourced the idea of setting up an ‘ Innovation Bus ’, and Barclays also continuously crowdsources parameters for its ‘ Social Media Credit Card ’, Barclay Card Ring . DBS and OCBC in Singapore reached out to the public through crowdsourcing in order to gain inputs for its future branch design . Capitec Bank in South Africa utilised
a dedicated website designed for hosting corporate crowdsourcing projects ( also used by such super stars as BMW , Unilever and Red Bull ) in order to get ideas for advertising its new personal finance management tool . First Direct , Commonwealth Bank and many others have also used the emerging tool of crowdsourcing with significant success . – Social Trading : A whole new world of trading stocks , ETFs , indices , commodities , currencies and other assets is emerging . It is called ‘ Social Trading ’. Companies like eToro ( the global market leader in Social Trading ) offer trading with all the client ’ s trades fully public . You trade with your own public profile and your portfolio and all your trades are entirely public . And here comes the magic : people can copy each other ’ s trades . So , if you have good results and you explain your trades well ( because you can comment all your trades , you can write to the community as much as you want and tag in people and assets ), people will copy your trades with a certain chosen portion of their own portfolio . And guess what : you receive an asset management fee after the total portfolio-size following you . This is a whole new world of Asset Management , Wealth Management , Brokerage and Trading Services . A world , well worth the Modern Retail Banker becoming familiar with .
As Charles Darwin wisely wrote : “ We are always slow in admitting any great change of which we do not see the intermediate steps .” My sincere wish therefore to bankers and banking executives all over the world is that they should be among the smart ones admitting this great change and should find the means and access to become ‘ Modern Retail Bankers ’. This is what ‘ The DARWIN Model ’ is standing for , and this is what the Retail Banking Academy – obviously on top of all best-in-class operational , tactical and strategic skills – so prominently provides .
David Gyori is a Faculty Member of the Retail Banking Academy ; Co-author of ‘ The FINTECH Book ’; founding Member of the World FinTech Association ; and a Member of the Panel of Judges of the European FinTech Awards . www . retailbanking-academy . org
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