exampleBank – Thought Leadership on a Digital Bank

By | June 28, 2014
This entry is part 6 of 8 in the series exampleBank Business Strategy

The exampleBank executive team has completed scans of the environment and their own position.  Before moving on to creating strategy they want to validate their own findings and get some thought leadership on what a Digital Bank should look like.  They have taken a number of trends from the Digital Bank book, so they decide to begin with Chris Skinner’s vision of a Digital Bank in Part 1 of the book, section “Launching the Digital Bank”.

  1. What feeling will the bank convey?  Techno bank or human?  Focus on human interaction or mobile self-service?  How is exampleBank different and how will this be demonstrated?
  2. What are the weak points in the offerings of current banks and how can these be exploited?
  3. Focus on opening a bank without the requirement for branches (even though we will have a small number of trendy branches–with Genius Bars)
  4. Secure access to the ATM network (e.g. Vocalink in the UK).
  5. Make everything about exampleBank cool.  The “Apple of banking”. Different, creative.  What makes Simple cool is a culture that is constantly innovating to improve the user experience such as forward-looking PFM with features like goals and “safe-to-spend”.  See Digital Bank interview with Shamir Karkal of Simple: “We are constantly innovating. That is the most important part of our ethos . I don’t know what we will be doing five years from now but we will continue to be innovating.
  6. An aspirational brand for the masses.
  7. Create an amazing online user experience designed for mobile and tablet computers.  A snazzy “app store financial offer”.
  8. Gain loyalty and advocacy.  See Digital Bank interview with Paul Say of First Direct Bank: “There’s also value in terms of word of mouth. People start talking about you when you do things like this on their terms, not the bank’s terms. On the back of this, business comes. A key thing here is that recommendation is as good as writing the business, as people do work on word of mouth, particularly in this age. So don’t look at this just in terms of bottom line contribution, look at it in terms of your brand credentials, customer service experience credentials and how customers will talk about you outside of the bank, in terms of word of mouth and recommendations.
  9. Start at the core of banking:  Deposit taking.
  10. Cool and fun digital bank branding.  Cool = bank that people want to be with (member or staff).  interesting, responsive, modern, transparent and honest.  Technology oriented.  Mobile first — also with a few branches.
  11. Transparency is part of the business model per the Digital Bank interview with Brett King, founder of Moven and author of Banking 3.0.  “Absolutely, that [transparency of money] is our secret sauce. What we are realising is that there’s a value exchange that occurs between the service provider (Moven in this case) and the customer as a result.
  12. PFM capable, easy to use online and mobile.
  13. Authentication using geo-location and signal.  Possibly also biometrics.
  14. Voice activated services.
  15. Strong loyalty program including gifts and real-time location-specific offers, etc.
  16. Demonstrate a deep understanding (based upon a wide variety of information) of the customer in all interactions.
  17. Strong marketing campaign, viral and mainstream involving a believable celebrity personality.
  18. Culture:  Happy. Strong customer focus.  Fair in fees and approach.  Customer outside-in experience design.  Fair is well-defined and practiced.  Social/mobile tech savvy.
  19. No demographic customer segments.  Target customers will be those who want to deal with a cool and fair bank through mobile devices and be treated like a human.  Sections of mobile channel are devoted to target needs, ethnicity, religion and gender.
  20. Social interactions on Twitter, LinkedIn, Facebook, YouTube are used to build a fan base.  “Screw-loose social lounge” for customers.  “live and unscrewed” social space for staff and management.  Note interview with Paul Say of First Direct bank in Digital BankWe know that customers had great experiences with us, and that was because they had real conversations with us and those conversations are two-way, and that is what we wanted to provide in our social media delivery.
  21. No lock-in fees, hidden charges, balloon payments, high overdraft charges, etc.
  22. Motto, such as “Don’t screw the customer”.  Offers that are easy to understand and predictable will back up this promise.
  23. Hiring practices focusing on social media outreach.  Selecting cool, friendly, fair, honest individuals who are tech-savvy.  Selection process involves testing, including character.
  24. Genius bars will be staffed by people who understand and can explain finance.
  25. Happy culture will create happy customers.
  26. Interest rate spread will be a source of income.  Since exampleBank will have a low-cost operating model it will be able to offer superior rates on both sides (for borrowers and investors).  This will be a key differentiation.
  27. There will be a focus on rewarding existing customers to build wallet share.  Knowing more about customers will allow exampleBank to provide rewards that matter to those customers.  Pricing will be a mechanism of rewards.
  28. Dress code is smart casual with designer labels.

Case studies that can inform exampleBank strategy are Simple, First Direct, Metro bank, Tesco.

Next on the agenda is to put pen to paper on the business strategy, starting with the corporate strategy.

Series Navigation<< exampleBank – Self ScanexampleBank – Corporate Strategy >>

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