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Are financial institutions ready to serve the millennial generation?

Highlights from Money2020 Europe, Copenhagen

Everyone enjoyed this year’s Money2020 – from the lego figurines the speakers received to the Scandinavian design and the music; all these made the inaugural European Money2020 feel like a fintech festival.

Perhaps yes, I wanted to see more energy. It was slightly disappointing for me, as a bank customer and also someone who is passionate about fintech, to sit in a room where people talk about innovation as if they’re talking about the weather. Are we once again, reinforcing the idea that banks are somehow entrenched in an older mentality and lack the ability to adapt? Luckily, there were few exceptions.

 

How Can Banks Bring Digital to Life for their Customers

1. Do banks really innovate?

The Money2020 banking discussion and also my own banking experience, remind me how much the banking experience lags behind, compared to everything else we use in our lives. It’s seen in the language, the experience, the design and culture of how banks present themselves. Last week’s event was no exception to this.

“Innovation” was more a buzzword the majority of people used but few really knew what it entailed in practice.

As Matthias Kröner, Founder and CEO of Fidor Bank rightly highlighted,

“A sustainable digital concept must be more than just lipstick on the pig”.

Only a few banks who were at Money2020 seemed to understand what digital innovation means for both the bank and its customers. Those standout banks in the know included: BBVA, HSBC, and Barclays.

Incessantly working in partnership with incumbent banks and fintech companies, these banks create relevant experiences for the younger generation of customers. The right mindset for the bank of present and future, I would say.

BBVA, for example, openly admitted working with various fintech providers to improve their customer onboarding experience. As a result, the bank will be able to verify more customers in a faster and more secure way, while their customers will save time and money.

However adopting and implementing a digital approach is not always an easy change.

As Matthias Kröner, founder and CEO of Fidor Bank said:

“Digital in itself is not a strategy. It’s just like having an engine. It’s what do you do with it?“

 

2. Banking the unbanked & customer onboarding

Closely linked to innovation was the topic of banking the unbanked in developing countries.

Ann Cairns, President of International Markets for MasterCard, passionately talked about their digital financial inclusion and digital identity programs in developing countries.

Ann also mentioned their “selfie security” innovative option of authentication:

“We are starting to see authentication happening in a fun and interesting way.”

The topic was also touched on by Stephen Stuut, Jumio’s CEO, who highlighted once again how technologies, such as Jumio’s Netverify, help banks manage KYC processes online with no in-branch appointments needed, helping the customer save time and money.

 

3. The customer at heart

While everyone was focused on discussing processes and finding new solutions to old problems, very few banks actually talked about customers and their role in this banking digital rebirth.

Perhaps the most pertinent remark was, the one made by Matthias, who broke the ice at the event, openly talking about what really needs to change in the industry, for it to be truly successful.

Matthias highlighted that

“banking is the only industry created without consulting the customer. Imagine a restaurant created without the customer in mind.”

World Remit’s founder and CEO, Ismail Ahmed also mentioned, how in Africa, trust in banks is decreasing and how other financial companies are taking advantage of this weakness:

“In Africa people place more trust in operators than the bank. “

 

4. Internal culture

Digital banking consultant and blogger, Duena Blomstrom and Matthias were among the very few who highlighted another problem – digital innovation also implies a cultural shift.

“Real-time banking is more an internal task and it’s not only a technical but also a cultural task,” stated Matthias.

“ (…) Money2020 was a good metaphor for today’s banking proposition. Beautifully packaged, hip and trendy on the outside and tangled, stiff, immutably old school and rather useless on the inside,” stated Duena.

 

Conclusions

With customers losing trust in banks, it’s imperative that changes are made. But will everyone succeed in providing relevancy to the new generation?

As Torsten Hagen Jørgensen, Deputy CEO at Nordea said,

“Banks need to change to be seen as relevant for the generation ahead of us and try to see things with a more innovative eye. “

About Jumio Corp

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