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How Can Banks Become an Essential Part of Customers’ Daily Lives?

 

Sunil Dixit
Sunil Dixit, managing director of BBVA Client Solutions

On June 26, BBVA took the stage at another important financial services event, this time at MoneyLIVE’s Digital Banking 2019 conference in London.

During the conference, Sunil Dixit, managing director of BBVA Client Solutions, leading critical initiatives within BBVA New Digital Business (NDB), took part in a leaders’ forum on the topic of “Becoming an Essential Part of Customer’ Daily Routine.”

Joining Dixit on the panel to share their insights into how the marketplace is evolving were Julian Sawyer, COO at Starling Bank; Joe Gordon, CEO at First Direct; and Alan Donnelly, head of UK financial services at Salesforce.

Their wide-ranging discussion centered on a variety of topics as well as questions from the audience, including:

  • To what extent is becoming an account information service provider (AISP) vital to retaining customer relationships?
  • What value are customers genuinely looking for from their bank today?
  • How are banks meeting the digital experiences and expectations formed by GAFA?
  • What value-added services can banks offer through digital channels?
  • Moving beyond the millennial hype: how can digital banks appeal to older generations?
  • Is marketplace banking the answer when trying to meet the demands of today’s customers?

To get a sense of what it was like in the room, we interviewed Dixit for his key takeaways.

Q: Why is this conversation happening now?

A: If you look at banking 10 years ago, banks were largely pushing products to the customer.

Now, with the adoption of digital, the industry lines are blurring. Big Techs are moving into financial services, and financial-service companies are moving beyond traditional banking. In times like these, whoever is able to integrate with customers’ lives will be the winner.

Q: What are customers looking for from their bank today?

A: Customers, especially millennials, are in a rush. They want simple solutions built on complex data structures that create the most value for them. They’re not lazy — the existing systems are. And they’re challenging the current system to be more efficient.

Other technologies and solutions in the market are already providing this. We had a challenge in tech 10 years ago because we didn’t have enough digital infrastructure. But a lot of data has been produced over the past six or seven years. More financial-services solutions should be available using artificial intelligence, and in particular machine learning.

Q: What about older generations of financial consumers?

A: The 50-plus generation is around 30 to 35 percent of the U.S. population, and they hold 55 to 60 percent of the investable assets. Some people assume they aren’t tech-savvy, but a recent survey found the majority of them have some type of smartphones.

The older generation is traditionally more loyal — as long as you can tailor your solutions to them. They may need low-touch help adopting new solutions, but they’re already using these technologies that will make it easier to leverage their financials in a more profitable way.

Q: How can banks change to integrate with customers’ lives?

A: With PSD2, customer data is now shared across all providers, including fintechs and third parties. It’s not enough just to aggregate and store that data — the key is using this data to give customers a more enriching experience.

Customers today have bank accounts with multiple banks; they take different services from different providers. But they don’t always have a view of how it all works together. We can leverage this data to offer integrated, context-sensitive, personalized, value-additive financial solutions in their everyday lives.

Q: Is marketplace banking the answer when trying to meet today’s customer demands?

A: Marketplace banking is surely a step in the right direction. It creates competition among different providers to offer the best products and services at a competitive price. But it’s still just pushing a product. And too much choice can actually create confusion!

Customers are expecting a more integrated and contextual solution that fits with their daily lives. So while marketplace banking is a step in the right direction, we almost need another layer that takes the data we have and serves up an individualized, value-additive solution for customers.

For example, we can tell a customer, “This credit card would work better for you,” and offer to link their accounts to make auto-debit payments. Or, it would be even better if our predictive analytics could tell them, “You’ll have shorter cash flow in December, so we’ve pre-approved you for a consumer loan to help you cover those costs in the short-term.” We can provide contextual and predictive solutioning based on what we know about people.

Q: Given what we just discussed, what do you think how NDB has delivered on these trends?

A: BBVA New Digital Businesses and our portfolio companies are always looking for ways to integrate more with customers’ everyday lives.

One example is Covault, a digital identity platform that uses customers’ banking information to verify identities across a variety of applications. Banks already have a ton of data but need to leverage it in meaningful ways for customers and merchants.

Another is Azlo, a bank for small businesses that’s going beyond everyday financial services to create a community hub for its customers. Finally, Upturn has created a credit-monitoring solution that allows customers to dispute discrepancies on their credit reports right from its website.

BBVA New Digital Businesses is constantly innovating through its portfolio companies to better address the evolving demands of financial consumers. For more information, visit the Portfolio webpage of the NDB’s website.

 

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