The Death of YourBank.com...?

Internet bank websites have fundamentally changed the way we manage our money - and entirely for the better. They have put customers in control - with 24 hour access, wherever and whenever you want. They have enabled banks to cut costs and deliver new and innovative services. So from all customers and bankers - thank you, internet bank websites! You’ve been great.

But the more I think about them, the more I think that they’re, well, getting a bit dated. The way we use the internet has changed radically in the last decade. Internet bank websites are transactional locations. We used to be fine about visiting transactional locations - in the same way we didn’t mind walking into a branch. Internet banking websites are not places you go for any other reason than to get information or transact. You probably have one thing you want do. You’re having to a make a special visit to your bank’s website in order to do that thing. Or you may have saved up a bunch of transactions - perhaps a few payments or transfers. You’ll have bundled them up because it’s not convenient to do them as they arise. I think this is the key to the problem. Internet banking websites are becoming inconvenient.

In fact, I think internet banking websites are becoming the online equivalent of having to go into a branch. The whole point of online banking is that the banking is supposed to come to the customer - and make life more convenient. This makes me think that if a customer could do the things they want to do in a more convenient location, there would be no need for them to go to the internet bank website. This is a shift which I think is fundamentally important for us to understand.

Today, I have a daily relationship with my social media sites - particularly with Twitter and Facebook. These are the places I choose to spend my online time. I will only go to my internet bank when I need to. To log into my internet bank account requires me to go through a complex log in process. I need to remember codes and use a fob or a card reader. Whilst this may be necessary, frankly - it is a pain. To log into my social media sites, I have none of these problems. As a user, my expectation of how easy it should be to access a website has been set by the social media sites. I do more and more things from my mobile devices - smartphone or tablet. Internet banking sites - even when specially re-rendered, often have processes that are hard to use when you’re on the move.

So where do we go from here? I think the time has come to start to break down the component parts of the internet banking website and place them in the locations where customers want them to be. That probably means moving banking services from internet banking sites and placing them within social media sites and dedicated mobile apps. With social media sites there are two benefits. First, the customers are able to access the services they want without opening a new site. Second, the appropriate level of security can be placed on each type of transaction. Why do I need card reader or fob and memorable data just to get my balance? Sure, setting up a new payee needs more security - but a P2P payment to an existing contact or friend could be made easier. With mobile apps, give me a balance checker app or an inter-account transfer app that requires a four digit PIN. Make it simple and easy - let’s not aggregrate everything into one complex app and place it behind laborious authentication.

So what does this mean to the retail internet banks? It could mean a fundamental change in the way in which their business models operate. At the moment, internet banks target their marketing at customers who log into their internet banking accounts. They deploy marketing assets across a whole page. They would have much less real estate to use on a social media site or on a mobile app. Banks have built up detailed profiles and propensity models based on what customers do on their sites. In the future, it would be far more important for the internet banks to be able to access their customers’ social graph information from their social network. It also means that internet banks will have to work out new ways to cross-sell their products online, off the back of transactions.

So, in summary - I think internet banking needs to evolve. Transactions should move to where customers choose to be. Retail banking needs to continue on its journey to be closer and more flexible to customer needs - and business models need to develop accordingly.

Of course, this is my opinion! I’d love to know what you think. Let me have your views - so drop me a line, I’m @StGilesResident on Twitter.