The BBA is now integrated into UK Finance. Please go to www.ukfinance.org.uk for new content and updates from UK Finance.
Material published by BBA prior to 1st July 2017 is still available on this website.
From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
Written by Avoka
In 1994 Bill Gates famously said, “Banking is essential, banks are not.”
Fast forward more than 20 years to the current era of smartphones and ubiquitous connectivity. People now expect to be able to connect to the services they need wherever and whenever they want or need to. One such service is banking. Most of the time people need banking services, they’re not ‘in a bank’, they’re somewhere else.
An obvious example of this is the ATM. ATMs give us convenient access to cash in places where we might need it – the high street, a shopping centre and, more recently, in pubs. Even though most ATMs are bank branded, they will accept cards from any bank. There is no need to find an ATM for a particular bank, any ATM will do.
ATMs were just the beginning of banking breaking out from the four walls of the bank branch. Now consumers can tap their phones in a store to complete a purchase of groceries, clothing or anything else.
But let’s look at another aspect of banking: new product acquisition, such as account opening or loan applications. These products help to fulfil a need, but is there actually a need to physically be in a bank to have that need met? Or is it just an extra (unnecessary) step in the process? For example:
Although many products may be applied for either online or by phone, our latest report shows far fewer banking products are available on mobile devices.
We’re already seeing disintermediation of banks through personal financial management solutions/apps such as OnTrees, Money Hub, Money Dashboard, where users can aggregate information about their banking products from multiple banks through a single user interface.
PSD2 will make this even easier. Facebook have filed a patent for social personal financial management which will allow aggregated banking information in Facebook and spending patterns to be confidentially compared to others.
There are two strategies here for banks…
To effectively offer new banking products in a context or setting where customers are actually considering those products, banks will need to break the tight association between the application process and the bank. This will require a system of engagement focussing on customer convenience which can be dynamically branded to provide a contextual experience for the customer.
We need banking, but if the banks don’t inject themselves into customer situations contextually, the customer will seek to find a more convenient and frictionless alternative.