The Bankwatch

Tracking the consumer evolution of financial services

Bring the banking experience forward to the transactional experience

There is an enormous intelligence in this paragraph from Dave. It centres on the reality that with each transaction, a consumer is making a decision about their banking service. That service may be merely a payment card, or it may be a BarclaysBofALloyds Card. it doesn’t matter.

What has really happened is that the product experience has transferred from the old view of product, the bank account, to the new view, which is the experience. The experience occurs at the ATM, the POS terminal, the online banking session, the iphone app (oops you haven’t got that!). The customer experience is in the use of the account, not in the interest rate. That rate stuff is relegated to another mind space that is related to return and investment quality. That other mind space is critical, but not at the point of transactional experience.

United we fall | Digital Money Forum

Retailers don’t want to stop taking cards and go back to cash, but neither would they expect the product to be provided for free. So what is the real dynamic? Many people might sympathise with the retailers’ central complaint, that interchange has not evolved to reflect the modern retail payment environment, while being sceptical that a regulatory transfer of resources from one group (banks) to another group (retailers) will result in any benefit to the consumer. But there is a dynamic, so we cannot be static in response. We as an industry (by which I mean the electronic payments industry) need to demonstrate to retailers that our products are worth paying for. As I’m learning from the Innovation in Payments work over at the CSFI, if we restrict the value proposition to the payment transaction, this is difficult. It’s the value-added services around the payment transaction that create our future proposition.

This is essential stuff to consider in building new services. The traditional view of biulding a bank account goes like this:

  • how many free ATM transactions
  • how many free debit transactions
  • at which balance will interest kick in

These assumptions are negative in nature in a consumers view. How about a value proposition that says ..

  • monthly fee = $ XX
  • ATM – free
  • debit – free
  • interest – zero
  • savings account – no debit and high rates

Relevance to Bankwatch:
Of course I am simlifying here, but the point is to address the features of the account towards the requirements of the customer. Customers want simplicity, and understandabilty [I know that is not a word]. Take a look at any telco site and do the opposite. Allow customers to understand on the first page, what they are going to get.

Written by Colin Henderson

July 29, 2009 at 16:16

Posted in Payments

Tagged with , ,

2 Responses

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  1. Colin – Everyday banking in Australia has certainly evolved to a point where the value proposition you describe is offered by almost every financial institution out here.

    Anthony

    July 29, 2009 at 17:11

  2. @anthony … that is very good to hear. That is not the case in NA or Europe. Can you provide any examples for the readers here? Thanks.

    Colin Henderson

    July 30, 2009 at 20:00


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