Simplicity In Banking Is Anything But Simple

CUSTOMER EXPERIENCE

It's time to build your simplicity capability.

Financial institutions are starting to realize that simplicity does not only improve the customer experience, resulting in trust and loyalty, but also reduces operational costs from redundant products, processes and dealing with customer complaints.

By Jin Zwicky, VP Experience Design, OCBC Bank, Singapore

How can banks achieve simplicity?

We can find great lessons from smart banking alternatives such as Simple, Moven, GoBank and Bluebird. What is less discussed is how to achieve simplicity in traditional banks that deal with a legacy of old processes, infrastructure and often don’t have luxury of starting afresh. Translating the big intent to achieve simplicity into realization is not easy.

The good news is that realizing simplicity is possible in any bank. As a design practitioner in one of the largest banks in Singapore, I’ve been leading a broad range of ‘Simplicity’ initiatives in the bank, such as website design, mobile banking, advisory tools, investment product communications as well as redesigning physical spaces. All of these initiatives have reaped measurable success in bottom line results and operational efficiency.

We saw double-digit increases in sales in investment and insurance products when we simplified the communications material. We saw 100% adoption rate in using the digital needs analysis tool in our top branches after we simplified the tool. We increased customers’ satisfaction in our account opening experience by simplifying the system. Finally, our simplified website was not only listed as The More Gorgeous and Simple Banking Website, but also we could save about 0.5 million dollars per year by reducing the number of pages in the website.

From years of my simplicity journey, I came to believe that ‘simplicity’ is not just a project. It is not just a team of simplicity specialists. It is a capability that we have to cultivate! Furthermore, it is an organizational culture that we have to create in order to achieve simplicity.

I came up with the following framework to illustrate this point.

It's Time to Reinvent Mobile Banking

MOBILE STRATEGIES

It's time to shut down the mobile banking operations at most banks. I say this after watching the development of mobile banking sites worldwide and realizing that most traditional banks don't understand the needs of the consumers they serve or the competition they face.

Mobile banking should not be a delivery channel for branch-based banking. It should be a contextual experience, with a clean design, simple interface and engaging platform to manage money. Unfortunately, most mobile banking sites look like miniaturized online banking websites. This is a problem as we try to serve Customer 3.0.

Last week, AXA Banque in France launched a new 'mobile-first' offering called Soon (website translated to English). Similar to other pure-play mobile banks worldwide like Moven, Simple, GoBank, Fidor, Hello, etc., Soon was initially introduced using a registration/invite model to allow for orderly scalability. Not a bank as such, Soon is a set of services accessible via a mobile application and backed by AXA Bank.

In an exclusive interview with Raphaël Krivine, head of direct banking for AXA Banque, "We started to engage with users in mid-2013, presenting the concept of the offer and the main functionalities to get feedback and comments (especially via our introduction video). It was very useful for us to validate the overall concept and to finalize developments in the right direction." He continued, "The offer is now available for the people who registered last year as a way to thank them for having been supportive from the very beginning.

Unlike virtually all traditional mobile banking sites, Soon (and the neo-banks mentioned above) rethinks the way mobile banking is done by designing a bank for the smartphone as opposed to simply providing access to banking products through a mobile device. This was done at AXA by creating an entirely different brand and mobile platform within the bank. This allowed for an alternative digital infrastructure, a lean start-up mode, open architecture and the ability to view banking from the customer's (as opposed to the bank's) perspective.

With a significantly lower cost structure, the emergence of pure-play mobile banks feels like a similar trend in the 1990s when direct online banks were in vogue. Some of these banks still exist such as First Direct and ING overseas and Capital One 360 (originally ING Direct US), USAA, Ally and Discover Bank in the U.S.

While many traditional banks have imitated some of the direct bank advantages, deposits at the top four direct banks have grown at three times the industry average according to TNS Global. Interestingly, while once having a pricing advantage compared to traditional banks, consumers also rate these direct organizations as 'more convenient' than traditional bricks and mortar banks.

The question is, will traditional banks ever fully embrace the process of managing money through mobile as opposed to simply providing mobile access to accounts? Will they lose the 'convenience advantage' with the mobile channel also?