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Technology Updated: 22 Aug 2017

Evaluating Banking 3.0

Growing access to technology and rising rates of digital literacy among consumers the world over are changing the way people conduct banking transactions. Banks have strived to adapt to the changing habits and needs of their users by creating a new banking business model, which has been termed “banking 3.0”.


The prominent expert in digital marketing, Juan Merodio, recently released a free ebook entitled “Banking 3.0, the technological transformation of the banking industry”, in which he examines this very process, distinguishing a number of key aspects:

Adapting to the new paradigm

Juan Merodio quotes a statement made by Bill Gates in 1994: “Banking is essential, but banks are not”. Merodio believes that banking 3.0 does no simply mean adding new tools to those already used at banks, but rather the construction of a new business model and overhauling existing banking structures.

The book poses a rhetorical question: “Do departments really have the same priorities today as they did 10 years ago?” The answer is obviously "No, which means a complete overhaul of the bank's structure is required [...]. For banks, the focus needs to be placed on the customer experience, creating a new layer of management to ensure that they adapt as necessary.” The objective? To make the bank more approachable to users and vice versa.


Data source

According to the author, if banking 3.0 is to satisfy the needs of its customers, at least 30% of budgets will need to channeled into online banking and mobile banking (following the example of Bank of America and HSBC). This, he says, is the first step that a bank needs to take toward the banking 3.0 model that he advocates; one capable of catering to all of customers' existing and future needs. He believes banks must also have a full understanding of which channels are most frequently used, by which customers, at what times, etc.


The book includes estimates for 2016 on levels of user interaction at retail banks. According to these figures, users interact with banks:

● 20-30 times per month via mobile devices.

● 7-10 times a month via websites.

● 3-5 times a month via ATMs.

● 5-10 times a month by contacting a call center.

● 1-2 times a month at brick and mortar branches.

These figures demonstrate a clear preference among customers for technological channels over traditional ones, leading the author to pose an interesting question: "If customers contact banks via media such as Facebook and Twitter, why do we routinely direct them straight to call centers? If the customer wanted to be helped over the phone, they would have called directly. Otherwise, all we are doing is increasing so-called customer friction".

He offers as an example Ubank in Australia, which placed a Skype button on their website and subsequently received 10% of all enquiries through this channel in 2011. Indeed, digital banking is naturally shifting towards omnichannelbanking.

The web

According to Merodio, a bank's website represents its "first step toward new banking" and must be at the heart of its digital strategy: it is bank's brand image on the Internet, and will shape the conversion subsequently had with customers. There are two strategies to help support this conversion:

1. Simple web design to make all content easy to access: “This needs to be coupled with personalized marketing systems to ensure that customers find exactly the product they are looking for.”

2. Ensuring usability: “Often when evaluating banks' websites we find they have usability issues [...], often using designs based on psychological processes associated with offline banking.”

But focusing a digital strategy on the web doesn't mean housing all content under the main online structure. Merodio suggests using "so-called landing pages”, but adds that banks need to answer two questions before creating such pages: “Who is the target?” and “What are our objectives? [...]. They must ask themselves about metrics."


“A customer needs a bank that understands their financial requirements and their financial position; they need tailored recommendations based on their own understanding”. The author therefore recommends crowdsourcing: a tool capable of ensuring that clients feel valued, as well as generating cost savings for the bank.

Examples of this tactic that he offers are HSBC's "First Direct Lab" initiative and the "Idea Bank" campaign from Commonwealth Bank of Australia.