Banking Future: Build your own bank

Twenty-one years ago banks were completely in control of the way that they interfaced with their consumers. Power was centralised around big institutions in business, the media and politics, and banks were no exception to this. They opened between 9:30 and 3:30 and closed at weekends. If you wanted to interact with your bank, you did it very much on their terms and in a branch.

Call centre banking was one of the first things that changed this relationship, albeit despite initial scepticism around the concept due to poor trials with poorly trained tellers on the telephones and customers who lacked the touch-tone telephone technologies.

However, for customers with the right technology and early leaders with the right staff, call centre finance made rapid progress because they were satisfying the demand to interact with a bank on the customers’ terms.

The late 90s saw the next major revolution in these relationships, as internet banking removed the need for human contact and empowered the customer even more. Instead of making requests of the bank, customers now had direct control over their own transactions and finances for the first time.

Skip forwards another decade and the mobile is now an increasingly important channel. Smartphones running Apple’s iPhone OS or Google’s Android software are already more powerful than the desktop computers of ten years ago and, with this portable processing power, we see another level of increased convenience and a decrease in the time that consumers had to invest in their banking.

Equally, and critically, it has meant that technology is now a social channel, and banks are struggling to work out how to be social. After all, so many of them are, by nature, anti-social.

Looking to the future, it is technically possible for a consumer to build their own bank using plug-and-play apps from different providers to suit their individual requirements. This will be a challenge to banks, requiring them to open up their closely guarded systems and technologies as customers are now in control.

As the proliferation and ubiquity of technologies and their socialisation capabilities become the norm, the real challenge will be around privacy and security for customers. For example, today’s telephones offer biometric scanning so tomorrow’s communications, which will be more like a watch or an ear-ring, will include retinal or DNA scanning as par for the course.

After all, as technology digitises bank relationships, banks must digitise customer safety and confidence.

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