The question of whether financial institutions (FIs) should be required by law to do more to protect their customers’ interests has been debated for several years, with many suggesting that regulations should be changed to make FIs do more. It is not difficult
to see how this question has arisen: our increasingly digital world has generated a rapid increase in ways and means by which to spend money and conduct financial transactions, and we are probably just at the start of this process. Yet, along with increased
opportunity has come increased risk, including risks generated by customers’ own behaviour. The risks of overspending and gambling are just two examples.
Furthermore, it is clear that the new players on the block are shaking up the financial industry, primarily through the innovative use of technology and finding new ways to interact with customers. The recent introduction of a gambling blocker by Starling
Bank suggests that supporting customers beyond the transaction may be one of the ways such companies are differentiating themselves from the pack. Several FIs now let customers block and unblock their own cards (allowing them to stave off spending binges as
well as increase security) and to do the same with specified payment types. Some, such as PayPal, allow customers to set up an extra layer of authorisation (a kind of ‘are you sure?’ check) before certain payments are made or accepted.
By helping customers to navigate the increasingly crowded waters of online shopping, banking, work and play, these FIs are using the latest in technology to impress their customers by visibly meeting what some would say are their moral obligations to keep
those customers safe. And, given that trust is known to be a fundamental element in gaining and retaining customers, this gives such FIs a commercial, as well as moral, edge. This is surely a win/win situation.
It is open to question whether these new ‘behaviour management’ capabilities mark a new era of moral responsibility among FIs, or whether banks and others have a moral role to play at all. However, with touchpoints proliferating it simply seems to make good
business sense for FIs to use their digital know-how to minimise risk to both customers and themselves. And if they can garner trust and loyalty by supporting customers in new and innovative ways, then so much the better for us all.