This article was first published in the Summer 2015 issue of OnWindows
The universal banking model is going the same way as the record store and the book store: in a rapid downward spiral.” This is the overarching belief of Brett King, the industry expert who has experienced a remarkable rise to prominence in the finance industry over the last few years.
Author of four books, the latest of which debuted at number two in the Amazon Bestseller’s list the first week out, King also hosts the largest dedicated financial technology radio show in the world called ‘BREAKING BANK$’ and invests a huge amount of his time promoting mobile banking and speaking about the future of the sector. In the last three years alone, King has spoken to more than a quarter of a million finance professionals in over 40 countries. He has visited the White House to advise the National Economic Council on the future of banking, and worked with regulators in the US, China and throughout the EU.
All of this is juggled with his unwavering commitment to his start-up company Moven – a downloadable bank account which incorporates mobile payments and banking capabilities, along with a gamification based financial wellness system. Moven is already set for growth in the US, New Zealand – in partnership with Westpac – and throughout Canada with TD Bank.
“We’ve invested over US$12 million in Moven so far and we’ve set aside US$8 million for expansion into new countries,” King explains. “We’re on track to have two million customers by the end of 2015.”
King’s vision for Moven is that it will effectively become a Fitbit for your wallet. “Moven is all about what happens before and after a transaction – providing real time, intelligent advice and ultimately saving the customer money,” he explains.
This, King says, is the future of the industry. At a time when a huge amount of change is underway, King believes that only those banks that adapt to the current landscape will survive.
“We’re experiencing fundamental changes to the finance industry,” King argues. “No other industry over the last 250 years has faced as much competition from new entrants split across product lines than banking is facing today. Over 45,000 start-ups globally will be in the fintech space in 2015, with a backing of more than US$30 billion in investment in the US alone. With this level of investment, it would be ludicrous to believe that traditional players can survive unscathed. Only those that are willing to totally change the way they operate will have a chance of survival.”
This adaptation, King believes, is all about going digital. “Customer behaviour is evolving faster than anyone could ever predict: 20 years ago customers would visit a branch twice a month. Today in many countries it’s less than once a year. That’s a 95% reduction. The only need for a physical branch nowadays is if something has gone wrong – it’s a channel of last resort.”
King believes that the future will be centred on mobile. Those, he says, that are moving branches into retail stores, or creating different types of branch strategies, are taking the wrong approach. “The issue with branches is about customer behaviour, not location. It’s not a design problem – changing the location or putting technology inside a branch is not going to solve the fundamental issue that people don’t use them anymore.”
But if the future isn’t about branches, then how can banks retain a relationship with the customer? “This is really key,” King says. “The first thing that banks really need to understand is that the majority of their face-to-face time with customers today is not spent building relationships or selling products, it’s spent dealing with problems. Isn’t it better, therefore, to build experiences that don’t need fixing?”
The second thing is that banks need to find ways to assist customers in their day to day lives at the moment of truth. “If they can do this – and use data to build compelling experiences – then they might stand a chance of success,” King says. “The future of banking will involve the removal of the core retail banking products that we see today, and replacing it with service moments that are embedded into a customer’s day-to-day banking experience.”
This is exactly what King is trying to achieve with Moven. For example, a customer may go into a store without enough money. Via a mobile app, Moven will offer emergency cash to fund the transaction contextually, rather than offering a credit card.
“It’s about removing all of the friction from the current banking system,” King concludes. “Unfortunately, pretty much every process in the traditional bank creates friction. Banks aren’t really accepting this at the moment, but now is the time for them to take their heads out of the sand and up their game.”
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