Old days at the branches, new days on the app

Last week I attended the Revolution Banking 2016 in Madrid, a conference where many bankers, Tech vendors and FinTech founders gathered to see the latest trends in retail banking, payments and customer experience. It was an incredible opportunity to listen first hand to top executives from the different financial institutions, explaining how they managed to turn obstacles into opportunities for success.

It’s clear that banks drove many of the innovations brought to the Spanish market. All the big ones were there to share what they’ve done lately and their plans to keep bringing more and more products and services to delight their customers:

• BBVA: Atom, Holvi and Nimble
• CaixaBank: imaginBank
• BancSabadell: digital transformation project
• ING: Twyp
• etc…

However the most interesting panel of all was reserved to the very last. The topic? To understand how a “bunch” of guys from Germany have broken the market: Number26. The presentation was called “Revolutionizing the banking experience”.

The room was full of bankers, in fact there were many people standing, as everyone wanted to know how this FinTech startup managed to get 160.000 customers in 8 countries!! Incredible figures but the most important thing they’ve brought back to banking is how users can find banking appealing and exciting. I even saw bankers recording the session like if it was one of the brilliant keynote from Steve Jobs announcing one of the new gadget.

It was indeed the very first time Number26 gave a speech in Spain. And it’s Nicolas Koop (Business Manager) the responsible to explain how CX is driving the market today and how companies from different sectors are pursuing the ultimate goal of delighting their customers by offering the very best experience regardless of the service provided.

As slides went by some of the core principles of this new challenger bank were presented:

• Bring back trust and excitement to banking
• Recognize the services they can improve and do better, simpler and easier
• Partnerships with other FinTech firms (e.g. TransferWise) who are already disrupting another vertical in banking (http://venturebeat.com/2016/02/25/the-bank-that-fintech-built-number26-and-transferwise-team-up-to-re-invent-banking/)
• Understand customers lifestyles and develop the services from there
• Being creative by pushing the boundaries of regulation and leveraging technology to delight customers
• Or how they have managed to deploy more “branches” (where their customers can deposit cash) than the biggest bank in Germany (http://techcrunch.com/2015/10/21/number26-turns-retail-shops-into-bank-branches-for-its-bank-of-the-future/)

The minute Nicolas finished and left the stage, he was surrounded by a bunch of “groupies” (a.k.a. bankers) handing him business cards and requesting follow up meetings.

Are bankers really so desperate for answers? Has Number26 demonstrated that a new banking is possible? Is it so disruptive? And why hasn’t there been a Spanish startup able to do this? Is this a good thing? Does the Spanish market deserve a stronger Fintech presence?

There is no need to be an expert to see that banks are struggling to get the same level of loyalty and respect for their firms so many years since the crisis began (fines, penalties, miss-selling products, etc.). Now these small players are trying to recover the trust lost and win over thousands of customers that are desperate to get a fresh new brand to deal with. Someone who really understand their needs and day-to-day problems instead of selling the promotional product based on the marketing campaign.

Nothing the banks didn’t excel at, when branches were the only channel. People trusted their branch manager because they understood their financial needs. They knew everything about their customers life (wife’s name, number of kids, where they worked, etc…). Not anymore.

This radical shift to digital channels has made banks caught them off-balance. They are struggling to keep the pace their customers are demanding (product tailored to them -nor the other way around-, transparency, simplicity, device-agnostic,…).

Nicolas used a Steve Jobs’ quote to explain their idea of how to approach customers:

Now banks have to turn data into insights to ensure they cultivate a fair and non-intrusive way of serving their customers. Until that day comes; bankers will have to mimic the way these challenger banks are smashing the market (doubling the number of customers in 6 months and having a waiting list for new customers). Things incumbent banks can only dream off.