The IT-powered future of financial services (I dream about)

I do a lot of work in Financial Services nowadays. Taking part in projects is one thing, sharing opinions & discussing visions with plethora of people who do the same is very important as well - they provide a lot of insight that is not necessarily aligned with what I personally think.

But honestly, majority of them keeps telling the same stuff:

  1. Banks, insurance companies, etc. should focus on keeping their customers on their WWW sites / in their mobile apps as long as possible: to increase the probability of additional financial product (credit, investment, insurance) sale

  2. To make sites / apps more attractive, these companies should utilize social media ideas / integrate with existing social media platforms ("collaborative banking", gamification theory, etc.)

  3. As they can't force the customer to verbalize his non-articulated needs, more & more product offers should be presented - maybe user will find at least one of them appealing enough. Just make them unskippable to make sure that user notices them & reads as much as possible.

  4. Internet / mobile channel should be perceived as a modern replacement of traditional branch - in other words: all what you could get from a real person in branch, you should not have available in browser's window / your mobile phone

This really is NOT how IT (to be precise - software) could aid financial services business in a meaningful way. At least this is not my way of thinking about it.

Not that kind of end-user product

For a typical person, financial product is not a target itself, it's usually a mean to get the actual target. A burden that has to be dealt with to enable options / achieve goals. It's like damn logistics or delivery service - you want it smooth, efficient & cheap, just to forget about it ASAP after the interaction. Unpleasant necesity to be kept to minimum level because:

  • there's (and won't be) nothing cool about banking itself - nothing to boast about; can you imagine social banking "trends" / "fashion"? :) Me neither - zero coolfactor. Period.
  • your personal finance is a very intimate sphere of life: there are several reasons you don't want "to go public" with the details (security, savoir vivre, nature of money as a resource)

Of course it doesn't mean there's no hope: they key is to make finacial services more convenient, faster & simplier (without or with limited sacrificing the security - vide PayPass or other contactless payments). To make banking more cool, you have to hide it deeper ;) - make it more an engine that runs other (external) services. Like a cable TV provider - doesn't have to be cool itself, but has to serve as a frictionless medium that provides the cool content.

Software is capable of much more

Just imagine ...

  • ... that you don't even have to visit bank website to get a purposeful loan; because you get it DIRECTLY from a retailer's site, it's just one of the payment options. So, for instance - banking services available via Open API. Identifying a user may be tricky, but have you heard about the way Klarna is operating?

  • ... fully outsourcing (as an individual entrepreneur) all your financial settlements (with your personal clients, material suppliers, etc.) to a bank - so you can focus on the core of your entrepreneurship (industry services) only. CRM, service portfolio, accounting & invoicing, payments (mobile PoS) & settlements - everything to run the business would be outsourced to someone who knows this drill & quite likely can do it better (bank).

  • ... that you're not spammed in product offers when logging in. Instead, banking site works like an personal advisor (that has A LOT of information about you already & knows how to process it to extract the actual knowledge about you, to LEARN you) - it suggests you something that may benefit you with the actual rationale (analysis & calculations) that lend credibility & justify the advice (that would help to convince the end-user that it's not a spam ...):

    Within last 6 months your balance have never dropped below X USD (min level = Y USD on ...), if you keep your incomes & spendings on that level, you can easily start a short-period investment for up to Z USD.

    or

    During last 9 months, you've been renewing your 3-month fund. If you consider swapping that with another type of fund, in the similar conditions you could save around K USD within 9 monhts period.

  • ... site that doesn't attack you with zillion of options & hundreds of products - I DON'T want to browse tons of tables & compare interest rates for different periods of time. I DON'T want to calculate IRRs/APRs manually in a spreadsheet. SIM-PLI-FY. I want a trivial, clear wizard that asks me 3-4 straightforward questions (with credible suggestions based on my past behavior), presents me 2-3 viable options & concludes with expected benefit (quite preferrably with some kind of comparison against the competition)

  • ... you don't have to read (& compare) 200 pages of formal regulations every 3 months (because 2 meaningful lines have changed), because your bank aids you with highlighting just the changed parts (added, modified, removed) & easy navigation between these.

All of the ones above have a one thing in common - they aren't just innovative & clearly beneficial to the consumer, but also can be achieved thanks to smart application of software products / service.