2019 Banking Predictions 6 mins read

I hope you all had a great festive period with loved ones and eased into the first month of 2019. Over Christmas I watched Back to the Future I, II, III with my kids (lets face it Christmas is not Christmas without Back to the Future). It got me thinking what would the almanac for 2019 read. 

So here is my 2019 almanac predictions.. 

1. Evolution of the ecosystem

The days of creating products without deep customer interaction have ended. Paraphrasing Conways law "organisations are constrained to produce products which copy their internal communication structure”. The ecology of the ecosystem will force organisations to shift towards experiences and services rather than silo products. For this to occur they will be need to engage customers from the start in the design phase, break internal silos, working radically differently with cross functional teams. To survive long term organisations will need to provide joined up experiences that make sense to customers. They will need to adopt service design and a whole heap of methods that involve co-creation with customers. We saw last year Monzo, Starling and many others organisations spending money on above the line marketing to drive awareness. You cant avoid seeing some sort of fintech poster while cramming onto the 7am Northern line to bank. This is only going to increase as organisations grow their customer base through a multitude of awareness and incentive drives. The outreach of services and experiences will spread like wild fire beyond the London epicentre to serve more users across the UK. As with evolution no organism can survive on its own outside an ecosystem. From an ecology perspective we saw a number of partnerships with banks and fintechs in 2018, we saw a banks purchasing and partnering with fintechs to rocket boast their offerings. The ecosystem will evolve new and deeper alliances will be forged to offer a “capability as a service” between banks, fintechs, technology companies and everything in-between. Alliances will become common place and the speed at which these are formed and reformed will move from months to weeks! 2019 will be the year plug and play alliances.

2. AI Becomes the norm but not with that name

With a plethora of data sources hitting people 24/7, people feel overwhelm which can lead to continuous anxiety. Apart from digital detox customers will yearn for a way to manage the flow of data and complete mundane tasks with little or no input from them. If you haven’t seen the Meerkat comparison advert its worth a watch. The marketing states AutoSergei™ will do all the leg work saving you time searching for better deals automatically. With open banking unleashing data back to customers and the application of AI we will have more autobots seamlessly integrating into our lives. Organisations will focus on connected finances, utilising data, technology and their newly forged alliances to provide delightful service experience that cater for customers real needs . Services that customers have never dreamt about however cant live without! People will find the value exchange of making available their personal data to take things off their thinking list well worth it.

3. The human touch

As a NLP practitioner I am fascinated by human behaviour, patterns and human instinct. In 2018 I presented a talk at EMS and World fintech forum titled “Digital human, winning experiences”. I explained 6 human needs of experience that people crave, one of which is connection. Think back to an experience you had where you felt delighted, where you felt heard and where you felt appreciated. More than likely this was a face to face human interaction. This is because we crave connection with other humans as its inbuilt into our primal brain. Given every touch point for a customer starts and usually ends on a smart phone, it will be important to focus on human connection. More effort will be made to connect the digital and physical from a human social standpoint, even the autobot will have personalities to make them feel more human so people feel the sense of connection to them. Being digital does not mean not meeting the customers digital only banks will run many more face to face meet ups, lab testing and social events in an attempt to get close to their customers and create a tribe of followers. Cost to serve will become important as the ecology evolves and new players have a lower cost to serve larger organisations will need to lean their operations. For long term survival higher value human interactions will rely on the human touch of people and the lower value interactions will be covered by the autobot. Organisations who get this right will deepen their relationships with customers providing tailored advise at a lower cost and from a customers perspective it will make the complex feel easy.

4. Trust me, it’s me! - Intelligent digital identity

How do you identify someone you know? Probably by the way they walk, look, their habits and behaviours. This is exactly what will happen with intelligent digital identity. The catalyst of digital identity is strong customer authentication (SCA) and GDPR. Organisations will need to ensure that customers data is securely available to the third party providers (TPP) and put the appropriate governance in place to ensure they identify the customer. Organisations will grapple to balance customer experience with security friction to find the right balance. Organisations will need to bring together a multitude of passive data streams such as how customers hold and use their phone,, how they sound, what they look like, where they are located at the time and a tool box of authentication methods to verify the customer. Once this trust element is overcome then IOT will really take off offering a connected service though multiple interfaces from your car, your fridge to maybe your toothbrush! 

5. SME market - the new gold rush

SME market has been highly underserved for the last decade even though it accounted for 99.3% of all private sector businesses at the start of 2018. The combined annual turnover of SMEs was £2 trillion, 52% of all private sector turnover. This year RBS alternative remedies package becomes available which will be like the California gold rush of 1848. Challengers will pitch for a lions share of the £425 million split into 4 pools. This sector is ripe for innovation in products and services and with the injection of cash we will see some amazing innovative & experiences. The long term winners will be the organisations that look to use ethnographic studies and create counted services that solve the customers unmet needs. Services that are useful and remove the need for spreadsheets and hours of back office work. The value add experiences and tailored products will free up SMEs gives them an opportunity to grow and flourish.

Conclusion 

So plenty of excitement and change for 2019 with infinite potential! The key here is focus on what matters for users, understand their unmet needs and create delightful, profitable and sustainable experiences. As Doc Brown says in Back to the Future 3 “the future is not yet written, it is what ever we make it”, so let's make it a good one.

Thanks for reading.

Bhavesh Vaghela

Digital Craftsman

My views are my own, delightfully dyslexic so please forgive the typos!