16 December 2017
Dharmesh Mistry

Future Banking

Dharmesh Mistry - Temenos

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The evolving landscape of bank-to-customer interactions

08 November 2017  |  3159 views  |  0

The history of banking interactions

When banking began, banking interaction started physically by visiting a bank, and it was not until the 1980’s that telephone banking came into play. Around the same time, Bank of Scotland launched Home-Link a service on Prestel’s View-Link system which could be accessed on a microcomputer. Although very crude, this was the first self-service channel for banking customers in the comfort of their home.

It was not really until the start of the 90’s that staff enjoyed similar capabilities in the branch, and this time it was the birth of the PC revolution that drove this trend. I was lucky enough to work on a project for Lloyds Bank to roll out 40,000 PC’s running Windows for the very first time in branches.

10 years later Stanford Federal Credit Union Bank launched the first online bank on the Internet in 1994. In terms of interaction we moved from Character User Interfaces (CUI) to Graphical User Interfaces both for staff and customers. Both of these required users to know the language (action and objects) of the bank e0g. New (action) Bill Payment (object). These applications were role or task driven. Apart from the changing technology, very little has changed in the way all users have interacted with the bank, although screens size varied more greatly with the advent of mobile and tablets in the 2000’s.

What do banking interactions look like today?

Some 30 years later we are now seeing a revolution in interaction with banks. This year has certainly been the year of the chatbot and start of the conversational banking era. A generation of WhatsApper’s and WeChat’ers find this new banking channel much more convenient with their lifestyle and general interaction. Certainly chat has taken over from SMS texting. One of the key benefits is that advances in Natural Language Processing have made it possible for users not to have to navigate screens, menus and buttons, they can use their own language, in their own time. Some of these NLP engines are not only incredibly smart at matching a customers’ intent to a banking action, but they also reflect the customers’ language in their responses to build a better rapport with them. Some are adding AI to get a better understanding of the customers profile and even emotion, again to not only execute the users wishes but to build a relationship with them with a more conversational approach that empathises with them.

This conversational banking has already found its way into mainstream Personal Assistant platforms like Amazon’s Alexa and Apple’s Siri. However, today they are far less popular than chat banking assistants, and there may be a good reason for that. Voice is a “public” medium, i.e. Someone close by can hear the conversation, which is not ideal if you ask for your balance in front of your kids. However, chat is a private medium and overcomes this issue. Plus, chat allows the “multitask generation” to bank while doing other things, where voice requires more focus and attention. This doesn’t mean that voice is dead, but that banks will need to look at how this could be used, embedded into different customer journeys rather than pure banking transactions.

Another set of channels of interaction have also appeared on the scene and are due for growth, these are “ecosystems”. These could be third- party apps driven by open banking initiatives, or devices (IOT) like Fitbit’s used for payments. Both are enabled by API’s and set for huge growth in usage. Ecosystem interactions therefore are UX-less, they are a technical interface not a user interface. Beyond millennials, the code generation (since 2013 a world-wide initiative was launched to teach all kids an hour of code) will script their own banking interactions. They will string together events and data from different systems to manage their money in a way that no-one bank will ever provide! For example, they will use orchestration or voice platforms to instruct money to be saved every time they exercise/walk, they will change limits and access on different accounts based on their location, and quite possibly they will even configure financial products to suit their own needs (longer credit terms exchanged for higher fees). And they will make this happen with advanced orchestration platforms, today sites like If This Then That and Zapier are fairly basic.

We also already have far richer visual interfaces for banking interactions through Virtual Reality and Augmented Reality. Here we are seeing interactions again moving away from standard windows, menus and buttons to much richer and often natural interfaces. VR and AR will have different use cases, but there are great examples already out there from house buying to stock trading.

The banking interaction landscape of the future There is a saying, “The best way to predict your future, is to create it.” Banks have an opportunity to design the way they interact with the general public, and create new experiences for their customers. The challenge they face is to choose the forms of interactions they want to support directly. Open banking is taking hold of the industry and transforming the banking landscape, and banks can now use API’s and entice third-parties to provide an even broader range of interactions without being disintermediated. Do you have the technology in place to create your bank’s future?

 

 

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