Do consumers of banking services want bells and whistles? Do the Millennials and Generation Z want feature-rich banking services, or do they just want to move money from one place to another, quickly and conveniently? The propositions adopted by the early challenger banks fit the bill perfectly, they provide a convenient means of receiving and storing salaries and other payments, and then a set of easy options for passing it on in the form of card payments, faster payments, direct debit payments and Paym.
This isn’t to say that as people get older, their interaction with the financial world doesn’t become more complex, but loans and mortgages and investments and insurance and so on, all exist outside of the basic necessity of the money in – money out requirement.
The bolt-on bells and whistles do not add any value to our basic need to send and receive value. People of all ages operate current accounts, and they do so to allow them to fulfil that basic need. In a society with essentially free banking, where all banks offer the same fundamental service, there is no real incentive to move from on organisation to another.
People don’t go shopping to enjoy the payment experience, but there are loads of payment “professionals” out there who think they do. Oh dear!
People don’t open bank accounts to enjoy the magic of faster payments.
The challenger banks responded to an opportunity: niche mobile-only services that were not restricted by vast legacy systems that could offer basic banking services at low cost. The services were simple, and their take-up has so far been promising, but now we are adding the bells and whistles. Why?
Bells and whistles give bankers the opportunity to excite other bankers and show them how clever they are, thereby justifying their existence. Most consumers never asked for bells and whistles and the vast majority of consumers won’t use them.
Consumers don’t necessarily want bells and whistles, but they do want services that don’t go wrong and that are available all the time. Perhaps we should pay more attention to that.