What will future innovation in the banking sector look like?

Ottoman admiral and cartographer, Piri Reis compiled the Piri Reis map as a world map in 1513. This map was compiled with military intelligence and now serves as a demonstration of the exploration of the New World. 

Similarly, when exploring new territory, one must compile intelligence from seemingly far flung sources, and channel it through a framework that highlights present needs, future needs, utility, customer value and business value.

As designers, we love our processes and frameworks. I’ve been thinking about and compiling my thoughts on user experience, design (not how it looks, how it works), for nearly two decades. I’ve been working with banking upstarts on their digital initiatives and more recently, as a result of this work, I’ve set out to create an Innovation Framework for Discovery, which I will present here.

A framework for channeling new product and service ideas. A way of thinking about the customer experience of banking and how customers interact with money. In a nod to the Ottoman cartographer, I’m calling this the Piri Reis Framework, a way of discovering the New World of banking and digital money and how to better serve customers.

The Piri Reis pillars: Information, action & intelligence

Most of the customer experience of banking and most tasks/touch points of the experience can be broken down into one of three categories. These touch points have various weights and ranks of priority. Some tasks are performed regularly. Other tasks are performed with moderate frequency, and some rarely if ever are performed. 

In order to build an elegant, easy to use interface for banking, in order to have the right processes that are in line with regulations and still effecient, in order to leverage Bitcoin, the Blockchain or other crypto-currencies, we need a way of modeling and prioritizing all these touch points.

The Piri Reis Framework stacks up as follows:

1. Information

The number one task most users perform in online banking in most markets is simple, and a predictable one, most simply check their account balances. Other tasks include checking account activity, what came in and what came out. Thus, making this information readily accessible, and easy to investigate, should something require a customer’s attention is critical.

Innovation opportunity: User experience and interface

Addressing this issue for customers is an interface issue. A matter of priority and making this information instantly apparent. In our digital, always connected, mobile world, when designing around how to present banking information, I suggest thinking about mobile experience in two ways - mobile on the sofa and on the go. On the sofa is more of a casual customer/software interaction, whereas mobile on the go may have more urgent circumstances surrounding the context of why a customer is using the app.

"My card didn’t go through? Let me log into my mobile app or call my bank."

Upstarts like Simple Bank (acquired) and more recently, German banking upstart Number26 are trying to chart new waters of by being "modern banks" and supporting today’s mobile customers.

2. Action

Wiring money, paying a bill, moving money from a checking account to a savings, sending money to a friend, are all actions customers perform against their accounts. These are actions a customer wants to perform quickly with little friction.

Let’s get this over with... 

How did iTunes first win the digital downloads race against free MP3s that proliferated the internet? They reduced the friction around the transaction. They made it so easy for people to act with a simple click, using it was a no brainer for most.

We see the legacy of iTunes reducing friction around digital transaction points, and these days, it’s not surprising to hear someone say they’ve racked up a hundred dollars a month in app and digital purchase through their iTunes account. Guilty as charged.

Similarly, banks have to reduce friction around these transaction points. One way is obvious. Improved processes, an improved user experience and more intuitive interfaces would go a long way to alleviating some friction, but it can’t stop there.

The myriad of banking products (products we take action against) banks offer are designed in a top down vacuum. Some basic actions have names I have never heard a real human utter. Have you ever heard a normal banking consumer say, "I am going to send a remittance?" Unlikely. It’s more likely someone would say "I am going to send money - for x". Using more natural language for core banking processes would go a long way.

Innovation opportunity: User experience, interface & Bitcoin

Time is money is an understatement. Clunky interfaces, broken processes and ongoing inefficiencies are costing both banks and customers, money.

As stated above, there is an innovation opportunity in reducing banking friction to perform core banking processes. Using natural language to name and organize banking products and processes is part of that opportunity.

Companies like Transferwise certainly see the opportunity to remove friction for issuing "remittances" (just kidding, sending money), and if you’ve ever sent money using a service like Western Union, you know they’re insanely expensive, opaque and difficult to use.

Richard Branson (an investor in TransferWise) raised objections over Western Union’s sky high hidden fees and joined a naked protest in opposition to these hidden fees. 

Bitcoin and Blockchain technology could further shine in the action category and be the platform for innovation in the action category. As banking and money becomes increasingly "social" - we will see more upstarts that leverage Bitcoin and reduce the friction and fees of sending and receiving money amongst family and friends.

3. Intelligence

The final pillar of the Piri Reis Framework is intelligence and automation. This one is a bit more mysterious, but is perhaps one pillar where there is tremendous room for innovation and disruption. What now seems like ages ago, Mint.com was one of the first companies to marry personal financial management (PFM - Intelligence) to banking. And Mint did well, and were eventually sold to Intuit.

Companies like Acorns, a well-funded upstart tackling savings through intelligence, personal risk profile, and automation of saving into assets with higher yields than savings accounts, and Robinhood, another well-funding startup attempting to democratize Mainstream investing for the mobile masses, these companies and many more like them, are attacking the market sideways from the angle of deeper intelligence, automation and democratizing access to wealth management.

I suspect more and more customers will come to expect their banks to provide them with deeper levels of intelligence into their personal finances, analytics and automation that move them to their financial goals. and automation that eliminates the pain of creating the right habits to get the right results.

Innovation opportunity: User experience, interface and Bitcoin

How many times does a customer want to see they spend a lot of money eating out at restaurants? After awhile, they kind of get the point. Today’s banking intelligence is thin at best. Some banks can provide some categorical spending breakdowns, some perhaps can provide suggestions of safe to spend and so on. Knowing this information alone will not change a user’s behavior. Deeper intelligence is required.

The user experience and the interface in this case, might provide a way for gathering intelligence and acting on it in a more social way. Thus, creating the right feedback loops to guide customers to their financial goals and compete against friends and family in the process. Banks could issue their own crypto-currencies, gameify the minutiae and pain of saving to financial goals, and the user experience and interface is the key to connecting these dots. 

The Piri Reis Full Banking Stack

The banks, institutions and currencies of the future will be digital. Banks and currencies that serve as platforms, banks and currencies, which are "programmable" and context aware can be much more agile (real-time) to address the endless ways people store value, exchange value, and perceive value.

The idea of "waiting on money" - should be a thing of the past, and will be. 

The timing of moving money can be life or death in some cases. Waiting should not be an option. Banks that become Piri Reis Full Stack Banks, more human centered banks, easier to use and more efficient, can become more profitable, and can serve society in a more humane and compassionate way.

The beauty of the change that is coming - you don’t have to put profits over people in the New World of Banking and Digital Currencies.

We live in a world of transparency, so we can't screw it up.

This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details. Thumbnail from gettyimages.

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