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The war for direct customer contact - Banks should fight along!

In March of this year, the World Wide Web celebrated its 30th anniversary. In these 30 years, there has been an exponential increase in the number of websites. Today there are over 1.5 billion websites on the world wide web. Although less than 200 million are active, these are still astronomical figures, which make it almost impossible for users to find the right content, service or product on the web.

Google’s search engine is the typical way for most users to resolve this problem (with a 91% market share and handling more than three billion searches each day) and therefore acts as the browser’s homepage for many users. But Google is reaching a tipping point, as Google’s pursuit for continuously increasing revenues has resulted in more and more ads appearing in the search results. Where in the begin days of Google there were only a few sponsored links at the right side of the page, today almost the entire first page of search results are ads and Google is announcing to go even further. The objectivity of the search results is therefore questionable. Especially when the few search results, which are not ads, are also sites which apply extensive Search Engine Optimizations (SEO) to appear higher on Google’s ranking.

With such an immense choice in websites, with search results becoming more and more questionable and customers wanting a more seamless user experience, a consolidation movement has started. Instead of the user going (via the search engine) to a specific website, you see more and more the rise of large internet giants and market places consolidating the offers of multiple companies. Many shops now sell their products via well-established websites and market places like eBay, Amazon, Facebook (Facebook Webshop) or, instead of creating their own websites. Other major websites try to give a more end-to-end user experience, which leads also to a consolidation of offerings from different companies, e.g. travel websites allow immediately to book hotels, buy travel insurances, book airplane ticket or rent a car.

This movement is driven by customer expectations (customers want a fluent end-to-end experience, which doesn’t include having to go to specific websites or download and install separate mobile apps), but also by technical evolutions (e.g. open APIs) and governments encouraging open ecosystems. The rise of the API economy and initiatives like PSD2 and Open Banking are clear levers in this direction. This trend will however lead to a handful players acting as the (distribution) portals to the internet and all other companies acting as (invisible) product factories in the back. Useless to say that these customer-engaging portals will have an unprecedented power (i.e. the power to make or break any another company) and make enormous profits from commissions on every transaction passing through their portal.

But even this consolidation will likely not be the end-point. Ultimately the WWW and the different apps on your smartphone, will most likely be replaced by an intelligent Virtual Assistant, which acts as a single interaction point for all your content/product/service requests. This Virtual Assistant will make intelligent product/service acquisition decisions itself, based on user preferences (like best price, best quality, best rated…​), but also via machine learning (fed by any digital tracking you can imagine).

The fight to become such a customer distribution end-point is starting now and will be played out in the coming 5-10 years, even though there are still some technical and organizational issues to overcome. The main hurdles are in my opinion still:

  • Authentication/Identification/Signing: the lack of a unique (international) user authentication mechanism, which also includes user identification and digital signing. At the moment there are a lot of authentication mechanisms, but either they are too local (e.g. Itsme in Belgium), they lack security, they don’t offer digital signing, or they lack the "identification" part. E.g. Google’s and Facebook’s authenticators are 2 internationally wide-spread authentication mechanisms, but they don’t provide identify verification (i.e. anyone can make a Facebook account on a completely different name), which poses an issue for many services. A highly secure, truly international authentication mechanism, which ensures identification and including digital signing, would accelerate innovation on the internet considerably.

  • Consent management: setting up a consent to share data to another company (e.g. personal, professional, financial or medical data) or to perform an action on behalf of the user is still a very long, intransparent and complex process (with user being redirected to the other website and there almost always requested to login again). These consents will become more and more important, due to privacy regulations like GDPR.

  • Efficient payments: paying for services and products on the internet is still complex. Different payment service providers like Stripe, Adyen, Ingenico…​ have already considerably improved the user experience, but it’s still not as fluent as one would like. A simplified consent management and universal digital signing mechanism will likely resolve this hurdle as well.

  • User interaction: the user journey of these customer-engaging portals is still not user friendly enough. The exponential evolutions in machine learning, chat bots, natural language processing and speech recognition will rapidly give an answer to this.

  • Transparency: most websites are still not very transparent with regards to fees and make use of complicated terms and conditions and all kinds of legal disclaimers, which impact the user’s trust and experience. Digital platforms should strive to a better and more transparent communication, putting the customer’s needs first, rather than trying to mitigate for all juridical risks and maximize short-term profits.

Ultimately the online customer engagement landscape could be reduced to only 1 or 2 international players, but even at that moment, there will still be room for a few local players, which perfectly grasp the local specifics and cultural differences and have a local physical presence.

Where the international players are likely to come out of the current big tech giants (Apple, Amazon, Microsoft, Google, Facebook, Alibaba, Tencent or Baidu), the market for the local players is still open and banks are very well positioned to take this spot, thanks to their local (physical) presence, strong IT affinity and large customer base. Other likely candidates are the telco players or a local (new, innovative) tech (or Fintech) player. Banks should therefore not miss the boat, as the first-mover advantage will be very important due to the strong customer lock-in of such marketplace platforms.

Many banks have already started integrating other services in their mobile and online banking offerings, such as buying concert and public transport tickets, managing your meal/eco/gift/service vouchers, paying your parking ticket…​ in order to provide a (financial) cockpit for the customer. Although these are excellent steps in the right direction, there is still a long way to go. Banks need to think long-term and put the customer’s needs first (customers want from their bank relationship convenience, transparency, speed and security), rather than considering this cockpit as yet another channel to push their own products and services. Although this might be interesting on the short-term, this will result in an abandoning of customers in the long-term, who look for more open and pleasant experiences, which deliver the same end result.




Comments: (4)

A Finextra member
A Finextra member 20 November, 2019, 05:57Be the first to give this comment the thumbs up 0 likes

Hi Joris, 

Thanks for sharing your thoughts. I agree with most of your opinons. 

Also, about the User Authentication and Digitla Signing, I wanted to draw your attention to Aadhaar framework in India.

It works amazingly well. It's a unique ID for individuals, that is actively leveraged by private and government entities for Authentication, eKYC, tax filing, and even fund disbursal. 

Joris Lochy
Joris Lochy - Capilever - Brussels 20 November, 2019, 09:21Be the first to give this comment the thumbs up 0 likes

Hi Jayanth,

Thanks a lot for your interesting comment.

Interesting to read about the Aadhaar framework. This is indeed exactly the type of (government-backed) digital authentication/identification/signing framework we should all be having. Unfortunately like many other such initiatives, it is a national (in this case India) initiative, which makes it very difficult for internation tech firms to use.

We therefore need a globally acceptation digital ID backed by all countries and governed by the United Nations. Some initiatives like ID2020 and ID4D have already been taken, but there is still a long way to go. Until then national (government) initiatives will continue to increase and some private companies will also make a shot for this market (e.g. the big tech giants, Tulioo, globaliD...).

Will be interesting to see how it evolves, but I don't expect a global digital ID any time soon yet.

A Finextra member
A Finextra member 20 November, 2019, 10:27Be the first to give this comment the thumbs up 0 likes

You're right, it is hard for a Unique ID to be accepted by all countries. But not impossible though. 

Lets say, each nation builds their own citizen unique ID, then a UN-endorsed Not-For-Profit entity can aggregate the individual IDs. 

On that day, cross-border payments will truly be revolutionized :) 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 20 November, 2019, 14:49Be the first to give this comment the thumbs up 0 likes


I agree. Re. this article, I'd commented that we've been waiting for Digital ID like the protagonist of the famous Samuel Beckett's play was "Waiting for Godot". But another commenter seemed to suggest that Digital ID was already a thing. I've seen a couple more comments along these lines by anonymous commenters on other articles. So, I've become a bit unsure now.

Joris Lochy

Joris Lochy

Product Management Consultant | Co-founder


Member since

05 Apr 2017



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