Digitisation is breaking through boundaries banks have dreamed of for years. The new report from the Competition and Market Authority will force banks to create ‘open API’, which will mean sharing their information, giving greater transparency for customers and allowing them to compare products.
Digitisation is also driving cost efficiencies with some predicting that around half of all jobs in banking could be chopped in the next decade as automation takes over.
Yet recent news has been quick to show that so-called artificial intelligence still has some way to go - with robots mimicking people at RBS and Atom reporting a lowly 35% success rate. We are now nearly a year on from the Back to the Future prediction of 2015 and while hover boards and wearable technology may have made it, truly digital banking hasn’t.
But the question is whether it needs to be. I am a firm believer that the better way is the third way – banks that ease process and access to technology but that keep a human touch.
The CMA report puts a big emphasis on tech solutions to help customers and while we welcome better transparency we are also aware that it is not an easy thing to achieve. Looking at other sectors like mobile phones or power companies you can easily compare like for like usage with minutes, data or unit breakdowns. But the banking world is more of a reactive space, and it will be difficult to find cost savings based on data alone, without a crystal ball to see how your usage may vary in the future.
Ultimately we believe that humans still want to make important decisions with other humans. Banking customers are, after all, real people, not just numbers at the end of a database. And real people have real needs that don’t always fit the boxes today’s computers create.
Digitisation has a firm role to play in banking and doubtless some companies will adopt the approach suggested by the CMA report. But is it enough when real people are trying to manage their money to fund some of their big life goals – be that saving to fund a holiday of a lifetime or securing a mortgage to buy a new home?
People are complicated. Their lives are complicated. As things stand today few computers can really understand that. And that is when they tend to say no.
Jon Hall Managing Director of Masthaven Bank was quoted in Retail Banker International as a Power 50 member providing his expert views on Masthaven’s digital culture, strategy and future priorities.