Bank on Innovation? By Jamie Keeley, Innovation Consultant

We live in a world where technology is thrusting change faster than ever. As a species we are evolving to sustain uptake of the constant bombardment of data, diluted in clever marketing. I, and probably all of us, need various elements to survive in this reality we have created over time: food, water, air and most importantly, money. Money is the underlying enabler that drives our choices and how fast we achieve individual successes.

Technology combined with money has launched us into a society of instant gratification, where almost anything can be obtained, for example, Amazon’s 2-minute delivery service in New York. The younger generations are more likely to experience addiction to this condition, as they are truly the first generation to have a digital nanny (iPad). They may be unable to verbally communicate at an early age, however, the ability to unlock, select, search and view seems natural to them. This technology works off the simple basis of input, process, output. The resulting behavioural science behind such interactions create instant gratification, with a bi-product of addiction. We are all victims of this but not more so than generation alpha (born 2011 -2025).

Trust is a critical element to all interactions and the faith we place in our desired outcomes. With this potential generation alpha in mind, it is hard to believe they will place this reserved trust in people over machines. People are unknown volatile individuals with the potential for various possible outcomes from any interaction. However, potentially a machine is truly their first interactive imprint in this world, one that delivers instant gratification at a simple level. Trust is earned through time. Although, with that in mind, who delivers more?

A person who gives you wrong directions when asked but obliged to help through moral duty or a machine that uses live data to give you step by step instructions, warns you of the perils ahead of your journey, the time it takes, transport options and any costs involved? So, do efficiency, speed and delivery equate to trust? If this is the case, then machines do have the upper hand and our trust should be placed with them. I can hear you saying that I wouldn’t give my data to anyone or I don’t share my data. However, the amount of data you already share unbeknown to you is vast and even more so when you are in a greater state of need.

Some say you compare you last experience to your current. The question is, do we do this with people and digital? I have already witnessed a change in culture within multiple organisations and financial services, where management can be impatient with their employees compared to expeditious digital experiences. They are already crying out for instant gratification and wanting immediate results. This is where innovation brings speed to new ideas and fails fast to create shared wisdom for any business. With this key business function, we can try and solve yesterday, today and tomorrow’s problems in different ways: empathise with your end customer; ideate your thoughts; and deliver a proof of concept interactive learnings. Only then you can see the issues you need to solve next and create experiences worth remembering.

However, will this innovation mechanic be required in the future with self-learning algorithms with infinitive amount of data processing your every outcome of your choices and future choices? Data is becoming more fluid with different providers, especially within banking.

In Europe, a law named PSD2 (Payment Services Directive) has been created to allow banks to share your transactional data to third parties with your permission. This has come to force to dilute the monopoly banks hold within the sector and allow financial technology companies, also know as fintechs, to create more effective solutions to customers’ problems. The majority of these fintechs invent mini innovations that could revolutionise the financial sector. However, these companies are already working with the banks they promised to disrupt in various programmes. What I have noticed though is that the larger financial firms are not utilising these great digital marvels and are reserving them till later use.

As a customer of instant gratification, I asked why to various industry leaders. Why as customers are we not experiencing theses innovation in our everyday lives? The answer I got back was quite a strange one: “We are waiting…” It seems that the long-awaited war to win customers is finally coming to a peak! Feeding instant gratification whilst creating prescriptive emotive connected experiences through technology is the chosen vice upon the modern world.

“For GAFA!”
Google knows your thoughts when searching, Amazon knows what you want in goods, Facebook social profiles you and Apple facilities the physical enabler. Together, they form the true super power within the United States: GAFA. Data analysis is the fuel to feed your addiction and they have the ability to predict what you want next. The financial services are awaiting the next steps of GAFA and Apple seems to be moving trust and technology concurrently to breach and disrupt. Apple pay, conjoined with the new IOS 11 Apple cash card, are key indicators to creating that digital trust. The next stages are simple: a friend that advises you on financial decisions such as Siri, and a platform to provide all the services offered by financial services, the OS itself. With the data included, Apple can tell you what you need before you need it.

With GAFA’s current monetary value, combined with technology patents, partnerships and current customer reach, the possibilities are endless. Already banking as a service (BaaS) is here and maybe now it is due to be upscaled. The question is, when will Apple decide to create this financial service exchange platform of products and deliver them through their IOS directly?

In this predicted future financial services will lose their service element and only be the manufacturer of products, allowing Apple to harness the customer-centric experience and deliver the financial products you require in the manner you want them. As a customer, would this benefit me?

My personal opinion is yes. I want the best value and experience for my time and money, allowing the Apple’s of this world to service my finances, fund options, retirement, lifestyle, allowing me to concentrate on my career and family. However, it all comes down to adoption and more so, trust. So I leave you with this question… Would you trust GAFA with your future over traditional financial institutions?

 

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