Bank tech roll-outs shouldn’t just cater for “pioneers”

Banks and financial services providers need to cater to the digital capabilities of all of their customers, rather than force innovation on those who might not be ready for it, say market participants.

“There will always be pioneers, people willing to try out new things and take risks on new technology,” says Finnur Magnussson, vice president at digital banking vendor Meniga. “There will always be super users who love new things and embrace your stuff. These people also tend to be similar to the product owners and innovation leaders at banks. So, the innovation leaders assume that all their customers are like that. In fact, a majority of their userbase will like things just as they are.”

According to an ING report published this week, 73% of customers feel banks have a responsibility to deliver the latest technologies. When asked about the technological aspirations of their main bank, 36% said it was being overly ambitious, while 22% thought their bank was being too conservative. 39% of those asked said they either did not know or did not care.

“People want more options open to them,” says Jessica Exton, behavioural scientist and vice president at ING Think and author of the report. “They expect their bank to be really at the forefront of delivering services and products that utilize the latest technology.

“At the same time, though, we’re not all early adopters, and we are all at different stages when it comes to how much technology we want to use to manage our money. I think some people might be in a place where they’re using an app and they’re happy with that service for the moment and don’t want to be pushed too fast into using all the possible options out there.”

Magnussson believes technology companies are running the banks in circles when it comes to interactivity. “They put the people and the user experience and customer experience at the forefront, not just introducing technologies for the sake of innovation. They figure out the most common things people need to do and introduce technology on the back of that.

Open Banking awareness

Across Europe, just over half of respondents to the ING survey said they were not aware third-party firms might be able to gain access to their financial information via regulation like the second payments services directive (PSD2) and Open Banking. 41% of those who said they were aware added they would be happy for companies to share their data this way, versus 47% who say they would not.

“The interesting thing to me that came out of here is that’s quite a big portion of the population to say, ‘No, I haven’t heard of this yet’,” says Exton. “But given that this is quite a new innovation within the whole financial sector, I think some of that is to be expected.

“When we take the portion of people who said they were aware of it and then ask those people if they were happy with it, we got a result which showed that awareness doesn’t correlate to whether people are happy or not to use the service.”

Magnusson says that a lot of people appear to be overestimating the impact of Open Banking and PSD2 in the short term. “We are taking part in a lot of projects and trying to do so from a user experience perspective. We’ve seen a lot of clunky UX, especially when it comes to fetching the information from all the third-party organizations. It’s going to be dependent on how you interpret the policies.

“I think it’s very unlikely, for example, that someone will want to connect together all of their banks to get a holistic overview if every time they have to sign in to each bank to view it. It’s not realistic to expect such engagement from normal people.”

When it comes to security, 70% of respondents to the ING survey thought two-factor authentication was secure or very secure, with 66% saying the same for fingerprint logins and 62% for single-use passwords.

“I think a lot of this is probably coming down to people being familiar with two-factor authentication, single passwords, and now fingerprint ID with its integration to smart phones,” says Exton. “If I were asked to rate the security of a method I use, I’m not likely to outright say that it isn’t secure. Newer technologies with which people have less familiarity, like face ID, score lower for security.”

According to Magnusson, most people don’t think about security in technological terms. “My experience is that banks often think, ‘lets bring in this new technology and everything will be fine,’ but sometimes they forget to think about customer appetite. You can create a lot of hurdles for those who might not be as tech driven as others.”

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