The proliferation of devices was the theme of the latest Digital Banking Club Live Debate, held at magnificent headquarters of The Law Society in London. A panel of experts took to the stage to discuss devices and the challenges they present for financial service providers. Ellie Chambers reports
The Live Debate was led by chairman Douglas Blakey, group editor of consumer finance titles at Timetric and brought together a panel of experts to discuss the growing use of a wide range of devices and the challenges to the banking industry that arise from this.
The debate attracted a full house with a record Digital Banking Club turnout of more than 150 guests.
The panel comprised Nicholas Merriman, financial services CTO at Avanade; Ian Morgan, head of financial services at Google; Simon Cadbury, head of strategy and innovation at Intelligent Environments (IE); Michael Nuciforo, mobile consultant, innovator, futurist and founder of Keaten; Terry Cordeiro, head of mobile at Royal Bank of Scotland (RBS) and Justin Basini, chief product and marketing officer at Zapp.
Blakey kicks off the debate by asking Cadbury what was meant by the proliferation of devices and what it means for consumers
Cadbury says: "Last week David Cameron spoke about ‘the internet of things’ and no one knew what he meant.
"The internet of things is a common term in the technology industry for talking about an interconnected network of devices that you can control in real time.
"The use cases for that are very broad, but what we are going to focus on today is wearable devices: wristbands; watches; glasses; even jewellery and clothing, because I think that is where we are going to see the most interesting consumer propositions developing in the short term and therefore where devices will have the most impact on financial services."
Blakey asks: "You were the first guys to launch an app on the Pebble smartwatch. So it’s an exciting time at IE?"
Cadbury: "Very much so. We learnt a lot about developing something for a new technology and about the need for a platform that is very flexible and scalable to these new devices."
Turning to Morgan, Blakey asks for Google’s take on the proliferation of devices.
Morgan replies: "We live in an increasingly connected world, connected devices are pretty much ubiquitous.
"If I asked for a show of hands in this room, I’m pretty certain each individual here would have at least one connected device with them, or even two, three, four in their possession or certainly at home.
"I think the opportunity is considerable because essentially, every consumer has a super computer in their hand whereby they can access all the world’s information whenever they want wherever they are.
"That’s of immense benefit to the consumer but also a massive opportunity for any organisation to market and promote their products."
Merriman adds: "People are much closer to their bank, they are much more in touch with their finances than they ever were.
"Recently I read that the busiest branch of one of our major high street banks was the 7.01 train from Reading to Paddington. The interesting thing now is there’s an opportunity for banks to get it right across all those devices.
"Prior to the internet ‘revolution’ there were only really two channels – telephony and the branch. Now that is really opening up."
Basini chips in to add a note of caution and speak about the challenges to the banks.
He says: "While there is a huge opportunity for the banks and financial service providers there is also a big threat.
"If you look at a recent study that came out of the US, millennials didn’t actually want to hear from their banks – they wanted to hear from companies like Google, companies that have their data and are doing interesting things in the market.
"I think the threat for banks is that these new players come in and they have an ambition in this space to reduce banking down to commodity level, where I just put my money in my bank but spend it, use it and analyse it through third parties."
Blakey gives Cordeiro a chance to respond, asking: "Given this threat, what do you at RBS do? Is customer experience where you differentiate yourself?"
Cordeiro answers: "I think technology can only get you so far. Traditionally the high street banks have been my competitors but more and more what the likes of Google, Amazon, and Zapp are doing is setting an experience that the banks need to meet and better.
"The experience of making a payment is actually pretty dull and pretty boring and so how do you innovate around making a payment? The way you do that is by focusing on the experience that happens before and the experience that happens afterwards.
"I think that’s going to be our challenge – how do we build an experience that keeps our customers coming back every time and keeps them engaged with us better than with anybody else?"
Blakey asks whether, with so many channels already for interacting with banks, consumers actually need Google Glass.
"Who knows? But you could have asked the same question about the iPad in 2010 and four years later I bet most of the people in this audience have a tablet computer," answers Morgan.
"It’s all about consumer behaviour and whether they are happy to embrace Google Glass.
"It’s about connectivity more than anything else and consumers have a thirst for connectivity. If you leave your phone at home or lose it, you feel detached from the world."
The conversation moves to whether there is scope for a UK bank to launch an app on a wearable device which allows customers to see their balance and most recent transactions without logging in.
Cordeiro says: "I think there is scope for that, whether it’s a watch or whether it’s a smartphone. Customers do have a thirst for connectivity and the reason they have that thirst is because they want to know stuff.
"They want to know stuff because we have given them the ability to get information quickly, so we have created that behaviour. The proliferation of devices has created an environment where, through digital, we’ve extended the opening hours of our branch.
"My challenge is: are consumers actually ready to bank on their watches? Are consumers ready to use Google Glasses to make payments?
"Only a quarter of the whole RBS and NatWest customer base use mobile banking."
Cordeiro adds that, although those using mobile banking engaged with the most frequently and were among the most profitable customers, they were asking for more features and for the bank to be more helpful and do more with the data they already have, rather than asking for more channels to bank on.
Nuciforo adds: "I can see Google Glass because it’s more efficient than a mobile. To search for content on your mobile you have to stop what you are doing, pull your phone out and concentrate on your phone. Google Glass will allow you to consume content while you continue your activity."
Other panel members argue that even those who need glasses to correct their vision do not like wearing them, whereas many people wear a watch by choice.
All in all, there seems to be a broad consensus across the panel that financial service providers in the UK market are currently underperforming in this area.
What we have at the moment is them just keeping up with customer demands. When the new challenger banks enter the market in earnest (Tesco Bank, Virgin Money, and Sainsbury’s Bank) they will do with none of the legacy systems that are currently one of the main barriers to the traditional financial services providers and they have deep pockets and a wealth of experience in giving the customer precisely what they want.
The Founders of the Digital Banking Club: Intelligent Environments
The Digital Banking Club is a joint project between Intelligent Environments (IE) and the consumer finance titles at Timetric; Retail Banker International; Cards International and Electronic Payments International.
Intelligent Environments is a leading international provider of software for mobile and online channels, serving the financial services sector.
IE’s philosophy is that consumers do not have a single channel preference when it comes to digital channels, but want to engage through any and all digital channels – both online and mobile.
Its single software platform, Interact, enables secure financial applications, engagement, transactions and servicing across all channels, from apps to browsers, tablets to phablets (phone-tablets).
IE has a diverse client base and number of high-calibre partners in the industry. It works alongside its clients to ensure they stay close to their customers.
Clients include Generali Wealth Management, Ikano Retail Finance & Loyalty, Lloyds Banking Group, Telefonica (O2) and Home Retail Group.
Intelligent Environments, Google Glass, Pebble watch and iBeacon
Prior to the debate, Intelligent Environments (IE) demoed Google Glass, Pebble watch and iBeacon, straight from its Innovation Lab which proved to be very popular among attendees.
In November 2013, IE was the first firm to launch a banking app for the Pebble smartwatch. The Interact Smartwatch App, compatible with any Pebble device enables users to view their live bank balance, recent transactions and will even vibrate when near the user’s overdraft limit.
The app allows bank customers to discretely get an instant overview of their finances, without needing to visit an ATM, go into a bank or log into a smartphone banking app.
In June 2013, research conducted by IE showed that one in six (16%) people were interested in using Google Glass to manage their finances, rising to over one quarter (26%) amongst 18 to 24 year olds. As one panellist said during the debate, Google Glass can be used through simple gestures like a wink or nod whilst carrying out other activities.
The Debate Panel:
(CHAIR) Douglas Blakey, group editor Retail Banker International, Electronic Payments International, Cards International, Timetric
Douglas Blakey is Group Editor, Consumer Finance at Timetric, chief of judges for the annual Retail Banker International Awards and lead market advisor for Timetric’s retail banking research division.
Nicholas Merriman, financial services CTO, Avanade
Nic has over 20 years experience in enterprise architecture and delivering distributed systems across industry, specialising in Financial Services. Before joining Avanade, a global Microsoft System Integrator, Nic held roles that included being the CTO for the HBoS Retail Bank, the head of architecture and strategy for wealth and international at Lloyds Banking Group and the Chief Channel Architect at Egg.
Ian Morgan, head of financial services, Google
Ian was educated in Buckinghamshire and graduated from Liverpool University with an MBA. Ian has a passion for the internet and has spent the last 12 years of his career online across a number of industries. At Google, Ian is established as a digital media/e-Commerce expert, with a focus on financial services.
Simon Cadbury, head of strategy and innovation, Intelligent Environments
Simon joined in November 2013 as head of strategy & innovation. He came from Lloyds Banking Group (the UK’s largest Retail Bank with brands including Lloyds, Bank of Scotland & Halifax) where he was responsible for payment technology and also sat on the Credit Cards leadership team.
Michael Nuciforo, mobile consultant, innovator and futurist, founder, Keatan
Michael is a global mobile thought leader and futurist who was previously the head of mobile banking at RBS. Prior to setting up his own business Keatan, Michael was responsible for delivering the mobile banking service for iPhone, iPad, Android and BlackBerry across both RBS and NatWest brands. He now advises some of Europe’s largest banks and retailers on mobile strategy.
Terry Cordeiro, head of mobile, Royal Bank of Scotland
Terry has over 15 years experience in the telecoms and mobile industry working in both the public and private sector before joining RBS UK (Retail) as head of solution design for mobile in November 2011. Terry is currently the head of mobile for RBS UK (Retail). In this role, Terry owns the strategic direction and delivery of the award winning RBSG (including NatWest) UK Retail Mobile Banking Service.
Justin Basini, chief product and marketing officer, Zapp
Justin has worked for some of the best product marketing companies in the world including Proctor & Gamble, WPP and Capital One. But what Justin really likes is creating new business which he did as founder of ALLOW, one of the world’s first internet privacy companies.