Other parts of this series:
I’m almost reluctant to write this blog because there’s a danger of the message turning into a “me too” kind of message. But I hope my last blog about the reasons that people are (in some cases, wisely) not moving to cloud — yet — has positioned me as a realist when it comes to the future and benefits of cloud for the banking industry.
“With the Covid pandemic in full swing it’s clear that we can’t, with any certainty, plan further ahead than our noses at the moment. But as we adapt to deal with our immediate priorities it makes sense to consider how these changes may help shape the organization we’re trying to build for the more distant future. With this in mind, I’d like to talk a bit about how cloud-based thinking has turned the industry on its head.”
There’s an old saying in the UX world that when someone is hanging curtain rails or putting up shelves in their house, they don’t want a drill. They want a hole in the wall.
People don’t want cloud. They want the benefits it can bring. Traditionally in banking there’s a server room in the basement. It’s full of computing power. It’s expensive, and there are sometimes long lead times as business cases are made, budgets are approved and hardware is installed. Then the moment those servers are put in the racks, they start depreciating anyway. It’s hard not to see this as a finance-driven approach, instead of a business-driven approach.
On top of that, the systems development life cycle (SDLC) is often 12-18 months. Users request features, and the dev team prioritises it and scopes it and project-manages the heck out of it until finally it gets delivered.
One of main benefits of cloud is it flips the traditional models on their head. Instead of buying a drill and making the holes yourself to install the shelves or curtain rails or whatever, you could just buy walls with pre-installed shelving to your exact specification. And if you decide, on reflection, that the shelves are too high or too low, that’s no problem.
We can take it a step further. Customers don’t want a bank account and a bank card.
Bill Gates said it best: People don’t want banks, they want banking. We’ve already seen customers being able buy coffee with their smartphone camera by scanning a QR code. I’ve even seen street vendors with QR code payment options.
Customers want to interact with their money using whatever channel they choose. If that’s a call centre operator, or self-service banking, or WhatsApp — that should be the customer’s choice. Except often it’s not. The banks are the ones pulling customers into the banks’ preferred channels, based on their own revenue targets, limitations and capabilities.
Instead of bank accounts and other products, what kinds of banking services do customers really want? We’ve seen crypto-loaded debit and credit cards. We’ve seen the ability to send money to email addresses and phones instead of bank accounts. We’ve seen multi-currency pre-paid credit cards that work with phone apps. If we accept that this is just the beginning of innovation in banking, we can accept that the technology-led SDLC solutions are not going to cut it any more.
We may not be able to plan further ahead than our nose. But maybe this pandemic is giving the banking industry a chance to pause and consider what kind of banking its customers will want in the future. This may cause it to turn its thinking on its head and reassess the way it does business, using new architecture that promotes business agility. To torture the metaphor a bit: when the customer comes in for a drill, let’s rather ask what the drill is for, what kind of shelves they want, and maybe whether they need shelves at all.