In the second in a series investigating the future of digitisation in financial services, TransUnion’s (formerly Callcredit) David Firth looks at how customer experience is set to be at the heart of Open Banking initiatives.
In the last installment, we warned against a “If you build it, he will come” approach to creating Open Banking solutions; there needs to be more substance behind a solution than the mere ability to deliver a technical capability.
One of our readers commented that if Open Banking was a Costner movie, it might not be “Field of Dreams” but instead would be more like “The Bodyguard” – not something you necessarily want to sit through but something you have to do to keep a relationship sweet.
For those of you not prepared to admit that you’ve seen it, in “The Bodyguard” Kevin Costner plays a hired protection for Whitney Houston; you can imagine the plot and the outcome. It got me thinking that our reader had a point – one of the movie’s highlights is the single “I Will Always Love You” and that’s what struck a chord with Open Banking. Bear with me.
If we want to answer the “Why would a customer consent to access to their bank account?” question, we need to think more broadly about what the consumer gets in return, the compelling reason – how do we convince the public that the exchange is a fair one and that the ability to manage (and derive value from) their own data is in their interests?
Showing the customer some love is at the heart of the answer. If customers feel sufficiently engaged and at the heart of the user experience, the value of the data exchange swings in their favour as well and as we see from other markets, they’ll become more fully involved from the outset.
Think about our interactions with our social media platforms or our mobile phone operating systems, for instance. How many of us genuinely take the time to read the terms and conditions of use or understand what we’re signing up for? It’s not that we don’t care – we genuinely do when those same T&Cs are shown to be against us – but we love the value we derive from the interaction. The value is manifestly evident and there’s a clear benefit to us agreeing to the terms. We trust it, but will our favourite social media platform always love us?
Under the revised Payment Services Directive (PSD2) and the UK’s Open Banking initiative, in January 2018 customer consent to share account information needs to be explicit and clear; if we can make the value of the exchange to the consumer as evident as social media platforms can, it becomes much easier for the consent to be gained.
As pointed out in the last installment, the payoffs for consumers aren’t all focused around account originations or product applications – there’s a myriad of benefit in customers consenting access to bank account information. Laying these benefits bare for consumers will be where they feel the love for Open Banking.
Of course, these benefits will count for nothing if customer consent can’t be quickly, effectively and smoothly gained. Consumers need a seamless user experience to convince them of the benefits. As we’re starting to see with GDPR consent, customer experience will be the battleground where brands’ access to Open Banking data will be won and lost.
A smooth, integrated journey makes sure that customers understand the value of the exchange; if the request for consent is presented appropriately, the benefits should already be stacked in the customer’s favour and the consent is a given.
If the consent request isn’t clear, the battle’s lost; customer cynicism will kick in and it’s an uphill battle to recover the position.
Integrating consent into the user experience is going to become a key skill for brands as they start to manage access to increasing levels of customer data. TransUnion (formerly Callcredit) has partnered with the UK’s leading data consultancy, Ctrl-Shift, to help explore the opportunities available to businesses.
Open Banking has the power for corporate and social benefit, too. Imagine being able to play safe on gaming or gambling sites in the knowledge that an Open Banking solution is running in the background to protect against going into unintended debt on an account.
Gaming providers will be able to make sure your current account doesn’t just have funds available without troubling your overdraft limit but will also be able to make sure you can afford your monthly bills, savings commitments or rent.
Customers might not love paying their utilities bills but Open Banking will help providers enhance the customer journey at both ends of the spectrum. While customer consent will help companies to identify vulnerable customers before they head into unintended arrears, it will also help providers or comparison aggregators work out the most appropriate tariff for their actual needs and will smooth the application process by verifying residency or eligibility.
And at a time when the FCA has recently raised concerns over how many customers fall in love with PCP (personal contract purchase) deals every year, lenders and car dealers will be able to demonstrate that as part of the PCP repayments calculation, they’ve already done an affordability assessment through customer consent to Open Banking data and making sure the buyer is within safe payment limits.
Putting the love for the customer experience at the heart of the consent model is going to be critical to making Open Banking a commercial success. Time will tell which brands hit the high notes and which need Costner-like help but ensuring customer’s clearly and cleanly understand the benefits will propel businesses to the top of the charts.