Redesigning our banking relationships

Jessi Pervola

Yesterday, I called one of my banks for help in making a small transfer. It should have been an easy exchange, but the entire process required me to answer a slew of personal questions, speak with four customer service reps and repeat the same information seven times. I felt like I was on the phone for days. Sadly, this type of customer service is the norm today. Why are banking systems and services so bogged down and broken?

Of course, not every system for every bank is badly designed; there are some banking products that come with decent tools and good service. But in general, it’s safe to say that most people aren’t particularly charmed with their banks, be it the digital tools they’re given, the interactions with a person on the phone, or the in-branch experience. And it doesn’t matter which bank you choose. You get a bank account because you kind of have to, and you probably pick one that’s close to your house or office. And then you try to interact with them as little as possible.

These badly designed systems and the mind-numbing “sameness” of the big banks, coupled with the financial crisis, has negatively impacted the relationship we have with them. It’s not that people hate their banks; it’s just that they don’t really feel anything toward them.

But what if a bank reframed its approach and decided to stand for something? What if it set out to become the bank that’s the easiest to use, or the bank that offers exceptional service to its customers above anything else? While these kinds of changes have to come from within an organization, design can help the financial industry do this, to fix its fractured experiences and start to repair the damage it has done to relationships with customers everywhere.

The commoditization of banks

Banking experiences don’t exist in a bubble; they are constantly compared to experiences we have every day with other services. Last week, I ordered a pair of boots from Zappos, the online shoe retailer, but received the wrong pair in the mail. When I called, the woman on the phone was genuinely surprised. She immediately sent me the correct size and a $20 gift card. I hung up loving Zappos and secretly hoping they make more mistakes on my orders in the future.

Why does this work? Well, to start, Zappos has very deliberately set the vision for its brand from inside its internal culture outward: to deliver amazing service, to embrace change, and the one I love, to build fun and a little “weird” into everything it does. Zappos has gone far above the baseline of simply selling shoes to being a company that delivers a carefully curated experience to customers. This experience defines its brand – it is the brand really – and makes people love them.

This kind of brand vision – something that connects to people in a real way and acts as a lighthouse to build experiences around – is missing from nearly every bank. And so it’s also missing from the tools they deliver, with the personality, look and feel all being, for the most part, subpar and the same. So rather than choose a bank based on values that people cite as most important when looking for financial products, like service and trust, they’re choosing them based on a feature like the number of ATMs in their area, which ultimately offers little incentive to stay as long-term customers. Really, the only thing keeping most people with their banks is that it’s a total headache to switch. Banks have become nothing more than a commodity.

Building genuine relationships with customers

The door is wide open for a different perspective and approach to banking that starts with building genuine relationships with customers. And if the financial services industry doesn’t address the issue, someone else will. And actually, they already have.

Like banking, mobile phone contracts are often considered a commodity. But recently some carriers have drastically shifted their strategy away from the industry-standard two-year contract to one that has open and flexible terms for customers. T-Mobile first led the way in this, branding itself as the “Uncarrier,” providing countless services to match that promise with messaging – and actions – that showed it is on its customers’ side.

And now T-Mobile has jumped headfirst into banking, creating a bank-by-phone business to tap into and support the market of 30 million unbanked and underbanked. T-Mobile has the platform, the customer base and the priceless brand position as the Uncarrier – the guy on your side – which, in banking, is a good position to have.

TransferWise is another service that’s come in from the side to challenge traditional big-bank practices, offering an experience with well-designed digital tools and customer support that enables people to transfer funds internationally for a fraction of the fees that banks charge. And its brand vision is all about re-thinking banking and challenging the status quo. Imagine what it could become if they were to release other types of banking products? This is why 50% of Millennials say they expect banking innovation to come from outside the financial establishment – because it already has.

But big banks are catching on. You may have heard that Daniel Makoski, formerly of Google, went to Capital One last year to be its vice president of design (not to mention the acquisition of UX agency Adaptive Path shortly after). Scott Zimmer, Capital One’s head of digital innovation and design, who recruited Makoski, has said that the products it’ll develop “… all center around people’s relationships with their money. It’s something we’re trying to heal, this gap between how important money is, but there aren’t enough tools for [people to understand it].”

This kind of innovation can deliver real meaning. It’s not just what technology might enable – mobile wallets, alternate currencies, peer-to-peer lending. It’s about first standing for something as a company and then rethinking the baseline to offer simple, effective tools and services that connect in a human way and address our real challenges with money – e.g. Am I saving enough? How much rent can I afford? If I put an extra 5% into retirement what would that mean in 30 years?

This is no easy task, especially considering that many banks have been built around channels and delivering on features, not integrated services and end-to-end user experiences. Ancient legacy systems and endless regulation add to the burden. But it can be done, and it should be done, or someone else will do it.

Innovation won’t always be a flashy wearable or driverless car. Sometimes the most powerful innovations are a perfection of the basics – pushing complexity to the background, re-establishing and activating a company promise and putting people at the center of the process. It’s about designing every part of the customer experience to deliver products with real value and meaning for people. And maybe this is what Makoski is tackling right now. It’s certainly what all banks should set their sights on if they want real engagement from their customers, instead of us just settling for them.


A condensed version of this article recently ran in American Banker. You can access it here or here