Elina Mattila, Executive Director at Mobey Forum, discusses the key trends from the eighth annual Mobey Day, hosted by Erste Group.
Banking is not just about money.
According to Lorenz Jüngling from The Isle Ventures, it is also about users and, most importantly, their emotions. And, as Danske Bank's Guri Hanstvedt commented, the strength of emotions should not be underestimated.
Challenger banks and fintechs understand this instinctively. Their products are designed around user experience, are highly functional and community-minded. For incumbent banks, however, adjusting to the rise of 'emotional banking' requires much more of a step change. Mobey Day Vienna gave attendees a chance to lift the lid on this emerging trend, and gain understanding of the strategies and approaches which are making it happen.
From payments to lifestyle
To resonate with customers on an emotional level, banks should avoid overcomplicating things.
Xiaoqiong Hu from Alipay explained that it was the simplicity and elegance of the Alipay platform, together with its ability to solve everyday problems, that has elevated it from payment method to cultural phenomenon. It has over 870 million active members – a lot more than the population of the whole of Europe. And during Double 11 (China's busiest shopping day) in 2021, it handled 1.7 billion transactions per second.
These characteristics, added Karin Van Hoecke from KBC, underpin any successful solution. Banks have to 'get comfortable with being uncomfortable' and actively look for these problems so it can address them on their own customers' behalf. For example, millennials weren't using traditional mobile banking apps, which were deemed clunky and unfamiliar. The solution? A dedicated platform that resembled popular messaging apps they are driving engagement.
Klarna's Robert Buenick agreed. He highlighted that consumers are on average busier and more stressed than before, so solutions which allow them to claw back both control and time are invaluable. For example, the overall online buying experience could be enhanced significantly by making it easier to shop online, manage spending and cashflow, tailor shipping, track delivery and expedite returns.
Living in a material world
The prevalence of digital services means the role of the branch is diminishing in everyday banking. The significance of a physical presence remains, however, as banks try to forge meaningful connections using their customers.
For example, Erste Group has created its Financial Life Park, an exhibit which provides financial management education for children and young adults through interactive experiences and guided learning. Inside a similar vein, ImaginBank's Jordi Guaus introduced the imagin café – a collaborative cultural space, which does not sell any banking services at all. This isn't the important part, he states; after all, Red Bull's website doesn't sell the energy drink. Rather, it sells an adventurous outdoor lifestyle that has become synonymous with the brand.
For banks, physical experiences and locations are answer to turning customers into fans. Within the highly-competitive open-banking ecosystem, enthusiastic brand advocacy will be a key differentiator.
Synthetic data for real results
An interesting challenge facing financial services may be the increasing use of AI to allow the delivery of personalised services.
The answer to making AI successful is to ensure it works for both the consumer and also the bank. Rabobank's Jan W Veldsink noted how personal assistants are increasing in both popularity and power, but suggested that it is the quality of interaction that's integral to creating trust between your assistant and the user.
Success here's hard won, however. Michael Platzer from Mostly AI argued that there is no industry more protective of customer data compared to financial services. This is a good thing, however when combined with stringent regulation such as GDPR, it does mean that data sharing can be restricted and innovation hampered consequently.
Yet with AI-generated synthetic data, advanced analytics and machine learning can be carried out on datasets that are highly realistic and representative. This delivers powerful customer insight, with no regulatory headache.
As we approach 2021, it's tempting to focus on the coming year. But Mobey Day laid down a larger challenge. Oracle's Francis Mac Aonghus asked us to leap into the future, start with the needs of the customers in 2030 and then work our way backwards.
From the debates and discussion in Vienna, it's clear that meeting the emotional needs of shoppers will be fundamental to driving engagement within this increasingly disrupted ecosystem.
For incumbent banks, the cultural and operational shifts necessary to enable these kinds of strategies will be significant – but not insurmountable. Industry collaboration continues to play a crucial role, for although no-one can predict the near future, together we can find the stepping stones to locate a better view.