Vanita Tanna, the Head of User Experience at Rufus Leonard. Rufus Leonard are digital transformation experts, and also work with some of the biggest banking brands in the UK. Here she shares her thoughts on digital transformation in the financial services industry.
In an age of Artificial Intelligence (AI), Machine Learning (ML) and Blockchain, it’s clear that the world of financial services is changing. But are the services currently on offer to the public fit for purpose or are we are ripe for a pivot?
As our digitally-enabled society learns to operate and finance itself through self-sustaining, de-centralised networks; specifically distributed, transparent and incentivised D-apps (de-centralised apps), services like banking have been forecast a death of redundancy.
The rush of large corporations trying to put their stake in the ground of the blockchain movement is testament to this impending reality. Most of these endeavours are mass scale, focusing on high speed trading, clearing and settlement, payments, trade finance, identity and syndicated loans. Such transformations are largely internal and invisible to the public, who is already well-versed in digital service and reward.
Financial services should no longer just be about connecting our pots of money together. When it comes to pensions, bills, savings, spending and income; the sector shift needs to be more than auto-switching accounts and auto-investment. Money permeates through everything we do, and now is the time for financial services to connect these pots of money to the dots of life.
To understand this proposed shift, we need to look at it against Maslow’s hierarchy of needs. Currently, most financial services and products hover in the bottom two tiers – ‘Physiological needs’ and ‘Safety’, and there’s an elementary and primitive need to be here.
Yet if financial services married investing, borrowing, lending, budgeting, saving and forecasting with the top two tiers – ‘Esteem’ and ‘Self-actualisation’ – we move from a ‘balance sheet’ distanced view to actually forecasting and navigating real life. It’s in these top tiers of Maslow’s needs that we move from joint account settings to family and society settings – and crucially, where people are able to grow and fulfil potential to their fullest.
From descriptive and predictive to prescriptive
Imagine Jo Public looking at her universal shopping basket. It automatically shops across stores according to her preferences for organic, ethical and lowest price. Alexa’s flash briefing informs Jo to forgo buying coffee today – this way she helps to optimise the coffee supply-demand from Nicaragua and save money.
On the way to work, Jo is nudged by the app. Her mobile has assessed her financial portfolio, correlated her purchase behaviour with her emotional radio waves en-route to work, and concluded that Jo is feeling a little low. Analysing her financial activity against projected market conditions, it suggests that now is a safe time to change jobs and increase her well-being.
As Jo is walking from the station to work, she passes Kat, a homeless woman. Automatically the money she saved from not buying a coffee gets transferred to Kat’s specialist homeless person cryptocurrency account, set up by the government.
On the way home, the app analyses Jo’s job search behaviour online, correlates her attitude to risk and updates her family investment portfolio. Due to Brexit and the increase in pension age, the app has been re-packaging the family’s assets according to the family’s philanthropic activities. It simultaneously releases a payment to Jo’s peer-to-peer loan, the timing of which has been optimised for both cashflow and ROI.
Jo switches from auto-switch to real-life game mode. While she appreciates the AI auto pilot, she also likes to take the driving seat once in a while. She updates the eco crypto-shares that they’ve set up for Ben, their animal-mad nephew.
This is not a Black Mirror tale of dystopia. This is a story of how AI is already beginning to move descriptive and predictive analytics to prescriptive analytics to tell us what we should do. But more importantly, this is a story of opportunity – an example of how by connecting user experience and behaviour to products and services, we can engineer a healthier, protected future for both Jo Public and financial brands.
Evolving the Store of Value (SoV)
Launched in 2016 and now supporting Windows, macOS, Linux, Android, and iOS, Brave is a free and open-source browser that blocks ads and website trackers.
In a digitally noisy world, Brave identified the most valuable asset as being the user’s attention. When users watch ads, they’re paid for their attention with BATs (Basic Attention Tokens – cryptocurrency) to fund their digital BAT wallets. With Brave being open for developers and development, the user-centred browser has flipped advertising and monetisation on its head.
This paradigm shift in the way we view software and business models is the reason why we should reassess our definition of SoV. Put simply, SoV (Store of Value) is an asset that retains its value and is easily transportable – traditionally applied to tradable goods and commodities such as gold. But thanks to AI, ML and blockchain, our perception of value has changed. No longer is it a property of commodities, but rather people.
For financial institutes, because control and reward will belong to the user, new models of reward and interest will be key. Some will include cryptocurrency, others will not. What we do know is that traditional cash or loyalty points won’t be enough to add value to banking customers with high SoV.
It’s change or be changed
True to the rate of change afoot in the financial sector, Blockchain.com reported an all-time high hash rate for Bitcoin (BTC). While start-up, Saga, announced the launch of SGA - the company’s token - later this year. Relying on reserves hosted in commercial banks, SGA is a blockchain-based cryptocurrency for international exchange governed by its shareholders. And it’s the first to introduce monetary tools modelled by global researchers and economists.
UI enabled by voice, chatbots, commands and even our vital stats have mobilised our hardware. But for finance to thrive in this new world of AI, ML and blockchain, it needs to mobilise its data, intel, functionality, tools, and services without compromising on security. From optimising global supply chains to being able to financially empower the homeless, changes in individual behaviours soon add up to societal progress.
The financial sector needs to re-define its role in customers’ lives by recognising the SoV of its customers. It needs to move from the servicing of individuals and individual pots to life connections that change individual behaviour with a societal impact.
It’s only by doing this that suddenly Barclays’ mission ‘Creating opportunities to rise’, Santander’s ‘See what’s possible’ and Metro Banks’ ‘Changing the way Britain banks’ all have a purpose, place and truth in Jo Public’s life.