A Tale of Two Cultures

Many years ago, when I was growing up in Germany, my mom would take me to a McDonald's as a special treat. It was one of the few American franchises you could find in Germany at the time, and it felt like home when we would go. My loving mother would purchase a hamburger for me and we would sit down at the table. Then, she would unwrap the burger for me, take off the top of the bun, and proceed to scrape off the onions, then put the burger back together. As you know by now, I am a very lazy person, and I didn't think my mother should have to scrape off the onions, so I asked her, “Mom, couldn't we just say, ‘Keine Zwiebel, bitte’?” That roughly translates to “No onions, please,” in English. I had been learning German in the school I was attending and one of our first vocabulary lists contained all the vegetables. She replied, “I wish I could, but they won't do that.” In those days, McDonald's wouldn't take a special order. Today you could order a cheeseburger with a chicken patty on it with extra cheese, two pickles, and light onions, and the cashier or drive-through person wouldn't even bat an eye. It's likely that this order wouldn't even be the most difficult one they had to take that day. However, 30 or 40 years ago, you got what you got and you didn't complain. Things were about to change though: A royal competitor in the fast-food market noticed that people weren't happy about McDonald's rigidness.

In 1974, Burger King ran television commercials in which employees sang, “Hold the pickles, hold the lettuce. Special orders don't upset us. All we ask is that you let us serve it your way!” Burger King was capitalizing on the fact that McDonald's refused to do special orders. Someone in the Burger King leadership knew that tastes varied and that it was inevitable that fast food would have to become customizable. This concept directly conflicted with the McDonald's philosophy of efficiency and speed.

Mac and Dick McDonald originally conceived the idea for fast food after noticing that hamburgers were the best-selling item on their menu. Because of this, they redesigned their restaurant to deliver a simple menu of three or four items very quickly. This was a revelation in the restaurant industry at a time when most restaurants had 25 or more items on their menu and catered to a local clientele. The brothers obsessed over each item in the kitchen and, more importantly, over each step of the process of making their food. The key to fast and consistent food delivery in the eyes of the brothers was a rigid, repeatable one-size-fits-all process that would be adhered to by every one of their franchises. For years, McDonald's resisted the change, believing that Burger King would fail under the weight of the custom orders. They thought that Burger King's service would be slower and that there weren't that many people who wanted to customize their food, so McDonald's sat back to see what would happen. After all, McDonald's wasn't exactly going bankrupt. In the end, though, McDonald's retooled its processes to accept customized orders—something learned from the upstart competitors—and continued to thrive.

Financial institutions are doing the same thing to customers when it comes to digital products. Today's digital financial applications aren't very flexible in terms of how they present the information and what they allow customers to do with their data. Typically, these applications show balances and manage loans and credit cards. They might even offer a few configurable options. Some financial institutions have even created a customizable landing page that allows the customer to pick modules to display, so they do not have to click through menus to see alerts or bill pay. However, by and large, the experience of the application is consistently the same, even when you customize the content. A consumer can't download their bill-pay payees or ACH payees, or upload information. These systems are the equivalent of my hamburger with onions. If you want to do something with your financial information other than what the FI is presenting you would need to download it and make it happen yourself. (In some cases even downloading it is not possible.)

The truth of the matter is that retail digital products and services are quickly becoming very personal to consumers, and finance products are among the most personal services to consumers. Consumers expect to be able to customize everything in their digital world; they want to change their backgrounds, organize their apps, pick their ring tones, and dress up their electronics with fancy coverings that fit their personality and lifestyle. Digital is not a one-size-fits-all proposition for the people of Earth. Each of them thinks very differently about their finances, and each of them has very different goals for the banking platform. Sadly, financial institutions spend a lot of time and money trying to be all things to all people, only to fail miserably. This is evidenced by the overwhelmingly negative reviews of most banking applications on iTunes and Google Play. Even when they manage to make one group happy, they wind up upsetting a whole different group of people. So what is the answer? How can banks get to a flexible version of banking that meets the needs of different customers? How can they retool their kitchens to allow a customized order, so to speak?

Having It Your Way—BYOP

I have been thinking a lot lately about what the new model for digital banking will look like and how to overcome the onions problem. Recently, I have discovered some concepts for digital banking that seem to resonate with the audiences I have tested them on. I call the concept BYOP or Bring Your Own Platform. In the current digital banking models, there is a tendency to ignore outside services that have become ubiquitous to digital customers such as email systems, task management solutions, and cloud storage platforms. Instead, FIs force their customers to manually enter information into their task management, or manually download digital statements and store them in the cloud. Digital platform providers choose to spend time and money recreating these systems inside their platforms, usually in the name of security or perceived convenience but with less than stellar results. The quasi email, messaging system in most digital banking platforms are no match for Outlook or Gmail. Task management tools such as Billpay or ACH are also no match for the current crop of task management tools. I believe new digital financial systems will be a series of integrations with platforms such as the Google suite or Microsoft suite. Here are some examples.

If digital services could integrate with Outlook or Gmail then payees could be imported or exported on the fly. Instead of typing in payee information, the contact feature of the email system would facilitate the payment. The interaction would look something like the following: User gets an email bill from a utility provider, and instead of logging into home banking or the utility providers site to pay the bill, the user finds the contact in his contacts folder, opens it, and clicks the payments tab. The payments tab has a dropdown menu that allows payment via Venmo, PayPal, ACH, or credit card. Each payment option would be facilitated by a payment provider that interacts with the Google or Microsoft platform. In this new model, it will be critical to keep the payees information up to date, so rather than pay for a bill payment service the end user would find more value in a service that kept their contacts up to date.

The same approach could be taken with task management. If you are a task management freak like I am (I have tried every productivity application that I can find), then having an integration with your digital banking solution and your task management software would be very valuable. Instead of sending email reminders for loan payments, the FI could create a task in the end users task management software of choice that reminds them when to pay their mortgage. The task manager software could also be used to facilitate recurring transfers. This is another example of a weakness in the current digital platforms. Each platform has a concept of recurring transfers but it usually lacks the options that heavy finance users would want to have such as more variety for transfer intervals than the standard weekly, biweekly options that are found in most digital banking systems. Using your own personal task manager such as Trello or Wunderlist to trigger automatic payments or transfers would allow the end user to exert far more granular control than the FI could ever hope to create. This is because the FI isn't trying to replace Outlook or Gmail, instead they have opted for a “one sizes fits all” approach. However, they cannot match the vast resources of either Google or Microsoft in this platform space. Having a programmable task feature would open the door to other kinds of automation and allow the user better control over their finances. This would also cut down on the support needed to maintain the redundant and subpar task and mail systems that are boiled into digital systems.

In the BYOP world banking statements would no longer take up space at the FI, users could instead opt to store their statements in their preferred digital storage platform. E-statements could automatically be delivered in a secure fashion to cloud-based storage platforms such as Dropbox, Google Drive, or OneDrive to customers who opted into the service. Many of the major storage providers will index documents and their content so it can be instantly searched. This would provide a huge improvement over the current solutions that are provided by FIs today. For instance if you had all of your statements stored in a folder called “statements” and you wanted to find every transaction that you paid to your homeowners' association (HOA), you could easily select the folder and type the HOAs name into the search box. The operating system would return all the statements with a transaction that matches the search criteria.

Financial account alerts could be channeled to a single digital endpoint and then sorted in the same way Gmail allows you to write rules to sort your incoming email. Alerts that meet a certain criteria could be sent directly to an accountant, or alerts that need immediate attention could be routed to the TV or Amazon Echo in attempt to get the customer's attention. Utilizing this method for alerts would reduce the amount of personal information that an FI needs to store and put the control in the hand of the end user. Savvy users might write rules that would respond to alerts with action, such as setting up an automatic task to transfer money if an NSF alert is received via email.

This new digital banking paradigm relies integrating features and services from platforms that users are already accustomed to using in their everyday lives. The BYOP approach would reduce the amount of money necessary to support digital services by removing features as well as improve aspects of the service by creating new features. It's as though you bring your own ingredients for the McDonald's cooking staff to use, but they would add the meat and take care of the preparation.

Great work! Now you are starting to remove the onions from the burger by providing data when and how they want it. There is still a lot left to be done to transform the culture of your organization to support this—after all, Burger King didn't transform all of its kitchens in its stores to support the new “Have it your way” ordering overnight. It took time, but with effort, you can get there. In the meantime, it is time to start learning what your members really want from your digital platforms by engaging them with digital marketing, tracking their behaviors via your new API and routes as they use your various digital channels, and reacting to their feedback and behaviors by soliciting them with offers and other pertinent information—all of which will be far easier now that you have implemented the FI platform.