18 October 2017
Michael Diamond

Fintech Forward

Michael Diamond - Mitek

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Disruption in Retail Banking

Growth in internet and mobile technologies has transformed many industries and economies. The market forces and competitive landscape has completely changed in many sectors. iTunes has fundamentally changed music industry, Amazon has driven most big brick and mortar book sellers out of business, Expedia is one of the worlds' biggest travel company….. the list goes on. Internet and mobile technologies are big disrupters for most industries. What started (and tapered a bit!) with the dot com boom of 2000 has become a lethal threat to most business models today. Powered by mass adoption in mobiles phones, proliferation of smart phones and cheaper band-width, internet and mobile technology have changed many industries. The banking industry in has been dominated by a handful of big global or regional banks for 100s of years. While the credit crisis has shaken this industry, the core market forces for the industry have not changed. Will Innovation in Internet and Mobile technologies disrupt retail banking? Will there be 5 new names in global top 10 retail banks in 2020?

For successful banks Digital Advocacy isn’t a job; it’s a state of mind

21 February 2017  |  4690 views  |  0

Have you ever traveled to another part of the world, where people spoke a different language and followed customs that were completely different from what you were used to?  Add to that a little jet-lag and local currency confusion, and suddenly you have an elevated heartrate and sweaty palms.

It is at times like this when we most need a guide.  Some travelers are independent and use only a guidebook and their own wits to help them on their journey. Others need a more active guide – someone who speaks the language, understands the customs, and eases the traveler’s entry into a new world.

For many U.S. consumers, the journey from the physical banking habits of their past to the digital banking world of the present can be every bit as disorienting as a trip to the other side of the world. And banks increasingly realize that they cannot expect consumers to make that journey without active guides to support and encourage the traveler as they take their first steps.

Banks need only look to the airline industry for inspiration. Airlines eased travelers’ journey from the old world of physical ticketing to the new world of self-serve kiosks.  Many remember that the airlines did not scrimp on their agent expense (e.g. reducing agents immediately after installing kiosks), but rather they had certain agents standing near the kiosks, available to guide a first-time kiosk user through the process.  This boosted confidence, instilled new consumer preferences for digital over human intervention, and led to the desired result: happier customers and less expense for routine transactions.

Banks need to think the same way. We spoke with a large international bank recently about their own efforts in this area, and their program serves as a model for other banks to follow.

This bank has created a new role in their branches: the Digital Advocate.  In short, the Digital Advocate’s role is to be present near the door of the branch, tablet in hand, ready to assist customers. Each tablet is equipped with financial product information so the Advocate can guide a first-time visitor to the right banking relationship. In many cases, the Advocate will enable a visitor to use the mobile banking app on their phone or, if they don’t have the app, to help them download it and get the credentials to use it.

This is vital, and few banks are doing it well.

Interestingly, a high percentage of branch visitors come with routine transaction needs.  According to Bain’s excellent study “Bank Branch and Call Center Traffic Jam”, 8% of branch visitors are checking their balance, and a whopping 37% are depositing a check.  At Mitek, we take personal offence at that last number, and banks should also.

Not surprisingly, Bain also pointed out that the industry is doing a poor job of actively encouraging and guiding branch visitors to a digital present.  Worse, the data shows a form of ageism in the market, where older visitors are less likely to receive personal encouragement from branch staff to use digital tools than a younger visitor – this despite the fact that boomers are heavy users of digital financial tools.

When it comes to helping consumers move from the physical to the digital worlds, what we have learned in talking to some of the 5,500+ banks that use Mitek’s Mobile Deposit is the same lesson any international traveler has already experienced: consumers success in the journey – in fact, generating interest on the part of the consumer to take the journey at all – is tied to the presence of a trusted guide.

Digital Advocacy isn’t a job. It’s a state of mind.  Successful banks understand this.  They staff and train accordingly.

 

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job title General Manager, Payments
location San Diego
member since 2017
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I'm currently the General Manager of the team that invented, patented, and now develops and markets the most exciting mobile product to hit banking: Mobile Check Deposit. Our payments team is committe...

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