Contextual Banking in Digital Lifestyle

Imagine a bank customer, Maggie, planning and researching to buy her first home. On one fine Saturday morning, while exploring new biking trails with her friends, she passes through a neighborhood that she really likes. She quickly asks her phone mounted on the bike, “Hey Bank, can I afford this neighborhood?”. The Bank App replies, “Sure Maggie, increase your budget by $80k...”, and then sends a detailed note on the suitability of that neighborhood based on factors such as schools, crime, walk score, taxes, weather, etc. This is contextual banking. Here the customer experience is being re-imagined to be context-aware, seamless and secure through innovative use of technology. This personalized experience caters to the expectations of the digital natives who blend these technologies naturally into their lifestyle.

In his book "Bank 3.0", Brett King said, “The future of banking is all about context”. If enterprises adapt such context-driven solutions in the brilliant wired world of always-connected customers, a truly dominant advantage can be gained by capturing and thriving in the last mile of their customers’ digital experience. By rethinking existing customer interactions and redesigning integration mechanisms, new higher levels of customer engagements can be designed. Such smart channels would unlock greater value to customers and foster further brand loyalty to enterprises. In this post, I’ll present a preview of digital connected experience of a bank's customers with such sample last-mile touch points.

But first lets analyze what the Bank App has done to respond to Maggie’s query. First, it is voice-enabled and can understand utterances in natural language. Second, it created an effective mashup by retrieving and processing four distinct pieces of information to provide that insightful response: the geolocation, the market residential prices in that location, the financial state of that customer, and the home preferences she has preset.

Devices are becoming smarter and are gaining the ability to think. Accordingly the interaction with them also changes. Devices are not passive anymore. They don’t just respond to our actions. They can initiative conversations and actions when they learn that their users are active and can be approached. It provides a unique opportunity for banks to interact with their customers in ways that was not imagined before. This always-on mode allows the banks to be more vigilant on behalf of their customers. They can prompt on certain activities, send them reminders, and in general keep their customers abreast on everything happening financially.

Secondly, these new digital solutions can be financial advisors at fingertips - sort of on-demand, in-context financial advisors. When banks become their customers’ friend and start engaging them on social media, they can get to know their customers preferences, their likes and dislikes. This gives the banks an opportunity to create and tailor their services to the customers' taste and financial conditions. How cool would it be to have banks obtain a solid, deep understanding of the financial situation and life goals, and then create a view and path to achieve their goals. And encourage them each day to work toward their goal.

This kind of always-on up-close involvement of devices by being embedded in our lives can indeed be unsettling. And regulation may prevent enterprises to gather certain data such as geolocation. But regulation will loosen up as people begin to adopt these new information oracles at their command. This increase in adoption of the virtual assistants will permeate our day to day activities, be it cooking, entertainment, fitness, and so forth. Why should financial well being and banking transactions be any different? Banking should and will become intimately integrated into the financial planning of an individual.

Here, I’ll bring forth two such mediums where banking can be integrated into our lives - In our living room and In our social life.

Bank@Home

In the era of branchless banking and virtual banking, having the bank in customers’ living room with ability to interact with and respond to them takes the customer experience to a next level. Employing voice-command driven smart-home devices can be very effective for interactive channel for basic banking services such as balance inquiry or bill payments.

Friend@Bank

Can the bank be a friend of the customers? Why not? Using Facebook’s Messenger Bot technology, banks can create banking bots to provide transactional and advisory services to their customers. Banks can learn likes and dislikes of their customers, distill those into customer preferences and use them to help customers create and mold their financial goals and planning.

In next posts, I’ll expand on the use cases and solution architecture for Bank@Home and Friend@Bank concepts.