Review: The Future of Retail Banking Europe 2017
Didn’t make it to Marketforce’s Future of Retail Banking Europe 2017 this year? Fear not, because we did. Joining reps from 50+ plus banks and loads of FinTechs, here’s our lowdown on three key themes at the event.
FinTechs cut in to customer relationships
There was lots of discussion around data and digitisation, especially for mobile banking. FinTechs got a lot of airtime, as they’ve been very effective in making certain products and services much more convenient – and at a much lower cost. Banks are understandably concerned that FinTechs are increasingly taking ‘ownership’ of the customer relationship – and in many cases the traditional banks are just left to provide back end legwork.
PSD2 looms large
Then there’s PSD2 (Revised Payment Service Directive). 2018 is set to be a game-changing year for retail banking when the new EU directive comes into play. The opening up of the payments system means banks’ monopoly on customer account information and payment services is about to disappear. In the not too distant future Amazon (and any merchant) can take funds directly from customer accounts – in effect cutting out the banks.
PSD2 brings the role of traditional banks into sharp focus. They have a lot of customer data, heritage, trust (to a degree), and expertise (in theory). There’s certainly a threat looming, but they’re in a relatively positive position for now. Many have developed innovation labs, but even with these, are banks simply too risk adverse to have the agility and fleetness of foot that’s needed in this changing landscape?
What do customers want?
Many banks are obsessed with the competition – this is great in helping to define your differentiation. But there’s still a lack of focus on what customers want or think – and differentiation without relevance is a recipe for disaster.
Ireland’s AIB and Iceland’s Arion Bank are trying new things – and testing them directly with customers. mBank in Poland implements different format propositions according to local needs.
And UK challenger Metro Bank is bucking the trend by continuing to open branches. The interesting thing for most of these is that they’re relative newcomers – they don’t have to optimise branches based on a 100-year old investment model. In our work with Lloyds Bank we’re developing a number of pilots full of innovations directly linked to consumer needs – some will get the thumbs up and be applied in the wider network. Others may fail, needing a “learn fast” and “move on” mind set.
This event was all about retail banking, but it’s clear that there’s still a big gulf between most banks and retailers when it comes to understanding customers and speed to market. Take our old client Tesco, for example. This retailer never spent money on the retail experience unless customers could feel the benefit – and they’re second to none in terms of speed to market. Retail banks could take a page out of their book by understanding that sometimes it’s better to get something done and try it out than for it to be perfect!