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The future of financial services is interaction. Bank on it.

The future of financial services is interaction. Bank on it.

Some big news a few weeks ago from the world of design may easily have escaped your attention, when a design agency was acquired by a bank. A minor story perhaps, but with significant implications.

The bank was Capital One. The design agency – UX consultancy to be precise – was AdaptivePath, one of the pioneers of the user–centred design process for the web.

Capital One’s competitors should have pause for thought. User–centred design and product strategies are now long established as a key differentiator in the digital marketplace. Capital One has taken the initiative in a sector that often appears to be struggling with a transition to a digital, and specifically mobile, world.

As we know, banking is… well, different now. The 2012 Edelman Trust Barometer saw financial services and banking ranked lowest on its global scale. The relationship between banks and their customers has changed – and yet trust is only one of the reasons why.

Those born at the time that the web as we know it came to be are now old enough to open their first bank accounts. For those who have grown up with the internet, the expectation is that the device in their pocket will give them access to whatever financial transactions they need. While the words ‘disruption’ and ‘innovation’ are certainly over–used these days, they perfectly describe the opportunities that exist in the world of financial services. The market offering has had to change so much already – how much more will they need to change to address the needs of the generation now opening their first account?

The Accenture 2014 North American Consumer Digital Banking Survey revealed that 65% of Canadian retail banking customers view their relationship as transactional rather than advice–driven. My father’s generation would have put much store by having a good relationship with your local branch manager. Can you imagine how quaint – if not archaic – that idea must sound to thse digital natives?

Data from Juniper Research estimates that mobile banking users worldwide will exceed 1 billion in 2017. Payment–by–text, something that has only made it to the UK in the last year, is old news in the developing world. The constraints of available technology in these regions have led to innovation that presents a huge challenge for the lumbering legacy systems we have in the West.

The shadow of disruption looms large over financial institutions as new services rapidly and credibly establish themselves in the public’s mind, and the dominance of once seemingly untouchable institutions begins to slip. Look at the stories of PayPal and Square, and how they changed the landscape of online payments; look at how Mint has created a seamless veneer over once mundane and clunky processes. And now Apple are entering the payments scene with Apple Pay. Can you imagine if Apple starting taking deposits, and securing individuals’ savings? What would an Apple iBank experience be like?

We may never not find that out from Apple itself, but you can bet that products and services are being discussed and conceived right now that seek to answer that very question. Maybe even behind the doors of Capital One.

Any organisation that can master the pairing of intuitive user experience across digital platforms, with relentless attention to detail in customer experience, is best placed for what’s ahead.

The future of banking belongs to those financial institutions who don’t just understand that radical, user–centred change is coming – but embrace it. And act on it.

By Rick Monro

Rick was UX Director at Fathom from 2014 to 2017, when he left to take up a role as Principal UX Architect at Puppet.

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