Brett King’s Bank 2.0 comment on customer innovation (Is Customer Experience innovation too hard for UK banks?),raises some important questions about how retail banks see their customers through the lens of a bank branch. King makes a valid point that customers are not necessarily seeking branch services and would benefit from improvements to other channels including on-line and mobile banking.
 
However, at a basic level, a typical customer doesn’t think in terms of ‘channels’ at all. Customers are interested in the security of their money and their ability to make payments and conduct transactions quickly and conveniently. Their perception of banking channels is focused on the products they hold, currently the bank cards in their wallet or purse. Indeed, bank cards allow customers to avoid the branch altogether by paying at retail outlets and getting cash from ATMs.
 
There are still some practical and straightforward innovations that banks can make to improve the customer experience, starting with a single customer view across all card products, allowing any Staff in any channel, branch, call centre or internet, to deal with any query. For example, customers are frustrated by the artificial split between credit cards and debit cards, which mean that the same person within the bank cannot manage both. The quest for efficiency through outsourcing of credit card operations, means that customers cannot deal with their branches, or even their bank, for credit cards and are forced to use remote call centres.
 
Centralised card issuance is still a problem for developing countries without a reliable postal system, and it does not fit well with the branch distribution model either,. It is also becoming less relevant for the modern day consumer and the "now generation". Using instant in-branch issuance to create and distribute cards when a customer is in a branch, rather than wait two or three days for the card in the post, would vastly improve the customer experience. It would also offer great service for the loyal customer who has just lost his hard won "front of wallet" card, putting speed and efficiency at the heart of card management. This is one innovation that has been embraced as a key differentiator by the new Metro bank.

The challenge for banks is that although these types of innovations are not ground breaking, they are difficult to implement where the banks have a history of multiple legacy systems, and their cards business split across silos and outsourcing partners.
 
The new entrants are certainly in a stronger position to have a clean technology slate and implement systems that can work across the business. It will be interesting to see whether they will force a change in the status quo and encourage the traditional retail banks to look at how they can reinvigorate their card management to improve their customer experience.