Invisible apps: removing friction from the online banking experience
John Rakowski, AppDynamics: a new stage of interactive banking is here
A new stage of interactive banking is here. Santander recently announced a new app that will let consumers speak to their phone about their spending habits. Lloyds announced a video interview mortgage service, allowing customers to apply without setting foot in a branch. And HSBC released an app which replaces a pin number for voice biometrics.
This is certainly exciting, but considering the development of the retail banking industry over the last few years it should come as no surprise. Insights from IT consultancy firm CACI showed that last year, current account holders collectively visited their branch 427 million times, compared with 859 million logins on a mobile device. This shows that mobile has now become the primary channel for day to day banking amongst consumers.
With banks reacting to this trend by closing branches, including high profile closures from NatWest, HSBC and Lloyds, they will need to fill this gap by making their online channels as intuitive, seamless and convenient as possible. With increasing competition from challenger banks such as Atom, which are not preferred by issues surrounding legacy IT, they also need to move quickly to avoid losing customers.
Although the use of new innovations such as voice recognition are certainly enticing and great for customers, their success will rely on how these apps perform in the real world and more importantly, how they blend in with the day-to-day activities of consumers. If voice recognition frequently mishears the customer, provides the wrong information, or is slow in responding, the novelty of using a new feature will soon wear off. A physical annoyance would be replaced with a digital one.
What consumers want most of all is apps that create as little friction, or points of frustration as possible, making the banking process effortless. To be able to compete in the digital space, banks must understand the way in which technology and consumer expectations are evolving and shape their IT processes around this.
Forward-thinking technology professionals across a range of industries are increasingly looking to create “invisible apps”, which aim to significantly reduce the amount of effort required by the user to access services. An app by travel agency PocketTour allows bookings to be made via chat app Viber, and Clara, a productivity app, can schedule calendar meetings based on text in an email, reducing the need for customers to switch between applications.
In addition, with the rise in use of personal assistants such as Amazon Echo, which sits in the background and automatically responds to the needs of the customer, consumers will increasingly expect services to fit into their lives rather than having to adapt to the technology. Although there have been some examples of this in the finance space, with ICBC in China allowing customers to use WeChat to check financial information, there is clearly some way to go.
With new technical developments set to change expectations on what a good banking service looks like, banks aiming to stay ahead of the curve need to ensure their organisations are capable of adapting to these innovations. This means understanding customer needs first and applying the right technology to support them.
To make this happen, there will need to be a notable shift in the mind-set of IT departments within banks. Rather than acting in siloes, developers and other technology professionals will need to understand the wider business and consumer expectations in order to apply the right technology to bring this along. Banking groups including Lloyds have shown progress here by adopting a DevOps methodology, enabling better communication between teams.
But for any bank aspiring to be a truly digital business, it’s essential that this goes further with closer cooperation between IT and the rest of the business. In fact, they should aim for a BizDevOps approach, in which other departments also take some ownership over collaboration and continuous integration.
A modern approach to development is also required, using a microservices architecture to break down large monolithic applications, allowing innovative services to be added more readily and easier integration with existing apps on the market.
Of course, all of this will be useless if the integration challenges associated with seamlessly connecting to legacy systems is not tackled by the established banks, as it’s these issues that create headline glitch stories. With frequent stories of customers being locked out of their accounts, and payments not being made, the customer experience benefits of innovative applications will become insignificant.
Amongst the backdrop of branch closures, banks must at a minimum ensure their systems have the capacity to deal with demands, along with the right performance monitoring software to spot any problems before they impact experience.
To remain a leader, it’s essential that banks are able to quickly analyse whether an app is delivering the intended value while improving customer loyalty. As RBS’s chief executive pointed out, its customers are its “heart and soul”, and banks must not forget this.
In the long term, once the wow factor of new features has subsided, it will be the banks that provide apps that work effectively, with as little effort from the consumer as possible, that will win the battle on customer experience.
By John Rakowski, director of technology strategy at AppDynamics
