Digitisation in banking | Interview with Brett King

Digitisation in banking | Interview with Brett King

We caught up with Brett King – Founder and CEO of digital bank, Moven – and got the low down on the main challenges and opportunities facing the banking industry in becoming digitised.

1.     What has been the most important new development for digital banking in the past year and why? 

I think 2014 is a year of consolidation and the realization that Mobile is here to stay in a big way. Probably the most significant development from a technology perspective is Host Card Emulation/Tokenization, which allows a card proxy to be much more easily integrated into the phone experience without the need for secure element and the use of TSM’s – I think those early wallet plays held back the industry’s use of the smartphone platform.

2.     Which innovations are you most excited by and why?

I think the recent acquisition of What’s App by Facebook has raised awareness of the importance of messaging, and while it is early in the cycle for banks, this will be an important trend in the near term as engagement will be driven by the ability to have a dialog with your customer. The innovation in smarter design and customer experience is extremely healthy for customers, and the drivers we’ve seen pioneered by the likes of Apple, Nest and others bodes well for pressure on banks to completely rethink the day to day role of the bank in their customer’s lives. This is exciting because it has the potential to redefine what we think of when we say ‘banking’ and indeed how advice and the platform of banking will evolve.

3.     How is consumer appetite changing and how will banks need to adapt?

Consumer’s are utilizing technology like smartphones, tablets and social media much more than banks do. For example, banks aren’t sure about mobile payments, but already we see one third of Starbucks payments being made via smartphone in North America – the question of whether consumers are ready for this has been answered, but most banks aren’t ready to listen.

The key shift here is not just about technology, but indeed the core skills of the bank moving forward. The future of the banker is not about being a good banker, a technical asset manager, strong bank product expertise or a competent financial planner. The future of banking is understanding how customer’s of all types interact with their money, and the bank as a platform, and responding to the needs of the client as they present.

The core skills of the bank in 10 years will be around data, behavior, and story-telling – the ability to put the bank in the client’s frame of reference as it is needed. The old marketing and product skills will be largely redundant, and the revenue of the business will be based on anticipation and problem solving. It’s really going to put branches and product silos under extraordinary pressure as these old metrics start to dramatically fail.

4.     How can the banking industry prepare for the emergence of digitised new entrants?

Incumbents rarely fair well when an industry like banking is disrupted. If you think of the books industry, very few of the big book distribution businesses like Borders survive the shift, and if they do they end up playing a secondary role to the new entrants like Amazon. The same is true in the store front music business with the likes of Tower Records and Virgin Megastores, compared with iTunes and Spotify. The bankers who argue that there are still customers who like to come into a branch, are just like those old bookstore brands that would argue people prefer to buy their books in a bookstore – it’s a nice romantic notion, but consumer behavior shifts more quickly to the new entrants because they have much lower friction, and better user experiences. The players that will survive this shift will be those that are aggressively going after new distribution partnerships outside of the traditional channels, and are using the bank platform like an API.

 5.    What does the bank of the future look like?

The bank of the future is not so much just a brand, and it is definitely not defined by a place or real-estate – the bank of the future is about intelligence, and access to the platform of the bank when and where I need it (utility). The bank of the future responds to your financial needs when and where you need it, and can give you simple advice everyday in making decisions as simple as “Can I afford to buy this flat screen TV or new iPad?”

And finally, tell us something about yourself that most people wouldn’t know? 

I have a Class IV Instrument Rating Private Pilots License (Night VFR) and I am a qualified PADI Advanced Open Water Diver