Is it do or die for the high street bank?

This week, the government division CMA (Competition and Markets Authority) has published a directive intended to ensure that banks take advantage of technology in order to do the hard work for their customers. But what does it all mean for customers in the real world? Benedict Ireland, Head of UX at Splendid Unlimited has been looking into the detail.
There are three main components of the directive:
Banks must implement ‘open banking by 2018 (PSD2): This means that banks must open up their banking platforms in order to enable a customer’s data to be viewed in places other than the banks digital and physical estate.
Banks must be open about their quality of service: A consistent measure across banks will rate the bank’s performance against competitors so that customers can make more informed decisions about the service they are getting from their bank.
Banks must send periodic ‘event-based’ notifications: When banks change the specification of an account type, or change T&Cs, they are required to let the customer know. They will now also be responsible for highlighting when overdraft charges will start for a missed payment, and will be required to provide a ‘grace period’. These notifications are also required to contain updates on quality of service.
The government has been increasing pressure on the banks to perform better for several years now, with measures such as changing the rules around account switching and increasing the number of available banking licenses in the UK.
The account switching legislation means that your chosen incumbent bank must handle most of the hassle of switching your account, dealing with the outgoing bank to switch your current account in around two weeks.
These measures in isolation aren’t hugely impactful, but when combined they set the scene for some truly disruptive banking opportunities.
We’ve seen similar legislation have underwhelming impact in other sectors, such as utilities, and our work with SSE has highlighted where opportunities for market disruption are still largely unexplored. Google themselves are skirting round the periphery and accumulating a number of companies such as learning thermostat makers Nest, who are well-placed to give them a foot into the energy sector. But the energy sector still has very much a watching brief as margins get ever tighter.
While many high street banks are actively countering government measures, the tide of change now feels both inevitable and exciting.
Many new ‘challenger’ banks are waiting in the wings, with contenders such as Atom, Starling and Mondo grabbing both headlines and the imagination of early adopters. It seems customers aren’t so opposed to internet-only banks if the waiting lists of new customers are to be believed. Once these banks obtain full banking licenses, it can be only a matter of time before they start to weaken the stranglehold of the major high-street players.
All provide immediate and accurate financial data to customers, but also have truly great user experience built into their apps. Clearly apps, and the digital estate, are of paramount importance for internet-only banks, and this incredible acceleration of technology is exactly what the government are after. And of course, it can only be good for the customer.
Consider that many high-street banks can’t provide this level of immediacy and response in their core data services, it’s clear that panic is setting in. Not only does the government demand it, but more importantly the customers do.
But is this really true disruption? We believe not. The products being offered (current accounts, savings accounts, ISAs etc.) are still the same products the high-street banks offer, so not what we would describe as challenging the current model of finance.
The interesting extension of this is how we can REALLY disrupt the market, by reimagining models of finance in ways that are currently not being provided by either traditional banks or challengers.
If the high-street banks continue to do nothing more than meet the letter of the legislation, the danger is that they will become purely safety deposit boxes, repositories for your money as customers turn to others for financial services, products, advice, management and that personal relationship new market entrants can provide. Where your money is won’t actually matter. As with all relationships you have to put the effort in, it can’t be purely one sided where the onus is so heavily on the customer to do all the legwork.
It might be painful, but grasp it and these changes bring with them a massive opportunity to become truly relevant and connected to customers lives.
Footnote: At Splendid Unlimited, we have worked with a number of leading Financial Services clients and as both experience design professionals and as consumers we are extremely excited about the possibilities. For further information, thoughts, comments or assistance with your own products and services, please get in touch.

Voice UIs and what they mean to your business

So Amazon launched Echo, and it’s really wowed the world… or not. Since then, we’ve seen the launch of Google Home, and Apple’s HomeKit. But, like the wearables market, the sales haven’t matched the hype. Well, at least this seems to be the prevailing opinion, but is it true?
Well kind of. But that’s not necessarily a bad thing. According to New York-based consulting firm Activate Inc, sales of Echo are ‘in-line with those of the original iPhone’. The key to iPhone was the success of Apps. Sure, we went through that terrible phase of trying every App we found, and that resulted in some truly awful experiences. But the market matured incredibly quickly, and Apple sorted out their App development and approval process.
While Echo and Google Home both have obvious service bias, that doesn’t have to stay the case, and indeed both companies are encouraging developers to see what they can do with the platforms in order to create compelling use cases.
At Splendid, we’ve been getting down ‘n dirty with Alexa for a while, and recently put together a demo for our Group’s Tech Expo, hosted in our London HQ. The Expo was themed ‘The Future of Retail’; therefore, we needed to think retail, but Echo already does that, with arguably the largest retailer in the world. So what better challenge?
The Institute of Grocery Distribution tells us that the UK grocery market will be worth £203bn by 2019, and we believe that the grocers who provide not only best value but best experience and choice are the ones that will triumph in the war for our baskets. We know that customers want choice, and people don’t like to feel they are ‘forced’ to buy everything through one retailer, which is likely to be a perception Amazon face with Echo.
We decided to create a fictional Grocery store, Splendid Grocery, to see what challenges there are with voice interaction in everyday situations, and what we could do about them.
So, what did we do? We’re not an international supermarket with access to a vast product catalogue; luckily Tesco has an open API giving us access to their whole product database, complete with product shots and pricing.
From there the development was run in three streams. With only one developer in each, one concentrated on building the VUI (the Voice User Interface because that’s what it amounts to) and ensured that Alexa (Amazon’s AI) stood the best chance of understanding what the user was asking for, and what they expected her to do about it. This involved creating utterances (lots of versions of phrases) and intents, which is what the user is expecting Alexa to do. These form your app interaction model – and in keeping with the AI nature of Alexa, apps are called Skills.
Just think, a user who wanted to know where their delivery is might say ‘Alexa, ask Splendid where’s my stuff’, or ‘Alexa, ask Splendid where my order is’ – you get the picture.
The second work stream concentrated on building a service that Alexa would communicate with, which integrated with Tesco’s API providing product information, such as pricing and product photography. Alexa would pass across the product information the user had said, and would also let the service know what the user’s intent was (for example, add {product} to my order).
We now had a working demo of a voice UI, which would handle key user intents, such as adding products to a basket, place a fictional order, check delivery dates and check stock in their local store.
However, we felt we were missing something. We knew voice would not replace other interfaces, but augment them, and that wasn’t getting across. So, we had a third developer build a responsive basket for the shop which showed the orders being added to the basket as the user spoke to Alexa. When a user placed an order – ‘Alexa, ask Splendid to order my products’ – the basket page became empty, and the user could see their order appear in their order history page.
Alexa demo video stillPlay
Through our explorations we quickly realised that a user, unless they are particularly determined, is unlikely to build up a weekly shop one product at a time. But they might add items ad-hoc throughout the day such as running out of toothpaste in the morning and saying, ‘Alexa, ask Splendid to add toothpaste to my order’. Or they may have a weekly shop set-up and simply say, ‘Alexa, ask Splendid to re-order my weekly shop’.
Throughout the Expo the prototype generated a lot of interest from both retailers and industry experts; the wariness was palpable. So what is it that’s making people uncomfortable? Well, for a start, choice. It’s hard to pick exactly the right packet of pasta when having them read out to you by a robot, and it’s more time consuming than tapping on a screen. Data can be a huge help here — if you know they always order Pilgrims Choice Mature Cheddar, next time they ask for cheddar you can make an educated guess as to what they want.
However, the fact is that a taxonomy which works for devices doesn’t necessarily work for voice. So we need to work hard on creating a taxonomy layer which effectively translates hierarchical choices we’ve become trained to make, and convert them back into much more natural, conversational experiences.
There’s also the privacy issue. As Echo has the concept of a single account, you might not want your kids/wife/husband/flatmates to know you’ve ordered Imodium. And the individuality issue goes a little deeper: think about prescriptions. Placing an order requires authentication of who the person is, to ensure we don’t make potentially deadly mistakes (although we have a hypothesis we’ll be testing out around accounts and security).
But none of these problems are insurmountable. And in fact, some of them go away when we apply voice as an augmentation of existing experiences. Within your Ocado app, imagine if you could ask Siri to ‘buy me apples, cheddar, and some water’ (Apple, in iOS 10, have opened Siri up to app developers through their SiriKit) and through being intrinsically linked to your account it knows your preferred brands, sizes and flavours. So, no need to filter. Again, single account linking, as is the model of almost all online shopping experiences, gets us around the prescription issue by inherently knowing who we are talking to. There are definitely solutions out there, we just need to be open to voice interactions to explore them.
Consumers are becoming more and more comfortable with voice interaction, and according to a very interesting lady we met at the Expo who had carried out some research, the vast majority of people surveyed who have Amazon Echos found that their use of voice interactions with other tools, such as Siri, increased (which many had not used before).
There are many other areas where voice could help — consider people who struggle to use today’s many buttoned TV or DVD controllers. How much easier to say ‘Alexa, ask Sony to put Channel 4 on’. Or in pharma, ‘Dave, you are due to re-order your repeat prescription, would you like me to order it for you?’
There are many sectors which could benefit from exploring what they can do with voice to better serve their customers. Our voice prototype work in the energy sector is also gathering steam (not literally), and currently allows home control apps to connect to Echo without the need for additional proprietary hardware, and again it works through an API from a very large UK energy provider… a demo that will be forthcoming in the next couple of weeks, stay tuned.
And in the meantime, get in touch and chat to us about what Voice could mean for you.