Banking’s digital future is all about the customer

"For banks, the value that we’re going to see going forward is in how these services are made customer-friendly, and how we turn them from paintings into a work of art."
Scott Collary, Chief information officer, ANZ

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There was a technology arms race for a long time in banking. Rivals looked at each other and saw 23 online services, so they worked endlessly to provide a 24th. During this time, a little of that core banking focus – providing value for the customer – was lost.

At the end of the day, customers simply don't use everything banks put out there. And for every new layer of service rolled out, the risk is the interface becomes more confusing and what the customer really wants to access drifts another click away.

For banks, the real value in the future (and many in the financial services sector are talking about this) is in how these services are made customer-friendly and how we turn them from paintings into a work of art. This will allow customers to really get what they want, get it conveniently and get it the way they want it.

The real point of difference in the market will be the interface and the customer experience. Banks trade on customer security, financials, privacy and data and need to make sure those fundamental attributes are locked in first and foremost. From there, it's about understanding how to make banking more meaningful and convenient for customers.

What people want

Looking at other companies, we've seen examples where a lot of money has been spent on products that received critical acclaim but, maybe a year later, it has emerged that instead of using this flash new app customers still use a browser to access the website.

In fact, in one case 80 per cent of customers were still using a browser. So was that really a good way to spend money? Armed with the facts about customer needs and usage, could the money and time have been put to better use? The answer clearly is 'yes'.

New products are constantly developed and there are always new pitches at banks. As a CIO it's pretty daunting and you could spend a lot of time going through all of it. For any company, what helps is having a really clear, defined strategy and a process for how to evaluate some of the new things in terms of what's important to the customers you have and the customers you want to attract.

Being customer fit

So, how do you tell what customers want? You start by getting really good at test and learn. In an environment like the current one, not everyone is going to be successful with everything. Figuring out how to get customer feedback clearly and how to turn things around quickly is vital.

Let's face it, as a bank we can't test with customers in production – not when we are dealing with their money and their private information. Innovation centres, including customer interactions and demos are good ways to go about that.

That type of two-way feedback is needed to make hard decisions. If you break it down into small enough pieces, you can continually add functionally but once it gets too minute it can almost become an intrusion.

This can happen if a customer has to re-download an app every couple of weeks or find a favourite function on a site because a bank put something out that may or may not be meaningful. There's a real balance to be struck between continual release and customer fatigue.

There's a saying in the US, 'pioneers get the arrows and settlers get the land'. The best operators are those conscious of putting too much time and intent into things that may not work, and that comes back to discipline. Too intense of a focus on these type of projects can lead to teams drifting away from core business needs.

Keeping a connection between innovation and business strategy is really important. Having business leaders engaged in the process so they understand it is absolutely critical.

What you do well and the birth of the disruptor

During the dotcom era, there was a rush from innovators to get into existing banking sectors like payments in a big way, which at the time was viewed as disintermediation. Now the same innovators have decided they don't really want to be banks, they just want to tap into the value stream. This is the birth of the disruptor.

The thing is, banks need to remember what they do well. There's a lot of talk about Facebook, for example, 'bypassing banks', by way of the new payment services they offer. When you look into it further, a number of these services allow customers to take bank debit cards and register them through their systems. When you think about it, that's not really bypassing anything. It's just enabling payment. So the fact that you can now pay somebody over Facebook means our focus should be on making sure they use an ANZ debit card.

There are a lot of new and innovative companies, products and services that leverage the amazing advances we see everywhere in technology. The key will be for us to sort through, learn, and partner with the right ones to continually reinvent how we do business.

How banks add value to a process or products will determine whether when customers choose to use the next big thing, they are using your product or somebody else's.

Scott Collary is chief information officer at ANZ.