Mobiquity featured in Fintech Finance: A potent cocktail – Mobiquity's Ruby Walia and Matthew Williamson in The Fintech Magazine

Any time, any place, anywhere – there’s a wonderful world you can share…

No, not the ad for Martini & Rossi, the famous Italian alcoholic beverage company that promoted its particular brand of vermouth with an incessantly annoying jingle in the 80s. In the context of financial services, ‘the right one, the bright [as in smart] one’ today is a description of our banking apps, which can transport us to a world of financial happiness and sort out our life admin at the same time, often by plugging into a mood-lifting universe of third-party tools. ‘Delight’ is an over-used word in the customer experience lexicon, but if a bank can use technology and partnerships to simulate the kind of feeling that Martini was hoping to induce – effortless pleasure – it must do more than the bog-standard.

Matt Williamson, global vice president of Mobiquity, the digital transformation consultancy, says it’s no longer sufficient to offer entry-level banking and financial services in our app-based and on-demand world.

“App usage is a digital lifestyle enabler,” he says. “We’re moving beyond simple financial tools, like checking your balance or making a payment, and providing services such as personal fund management and other tailored  advice. The bank app on our phones uses geolocation to identify where we might make a purchase. It knows, for example, if we’re at a garage and perhaps thinking about buying a car.” And, so, the argument follows, it should be intelligent and intuitive enough to pop up, in that very moment, with appropriate advice and financial options. Except – and here’s the rub – is it always appropriate for a bank to be doing that? Is the technology in fact in danger of creating moral jeopardy for institutions whose most valuable point of difference in a market of spontaneous gratification is that they can be trusted not to exploit us – especially since what powers these tools is our data?

That’s the issue that innovative incumbents like TD Bank, in North America, have been grappling with, not least because there have been instances of ‘helpful’ contextual algorithms creating inappropriate suggestions with brand- damaging results. American retailer Target, for example, which tracked the consumer data it had access to, to predict where a customer was in their pregnancy, fell notoriously foul of contextual customer experience when it sent baby clothes coupons to an expectant teenager, who hadn’t told her parents.

So, digital technology, by providing context-specific information, can tailor customer requirements to precise needs. The role of a financial service provider then becomes proactive rather than reactive. Needs are anticipated, desires are fulfilled, and value is added. But a line must be observed between being helpful and being intrusive.

“It comes down to value versus privacy,” says Williamson. “If something is unsolicited and we feel we’re being spied on, we’re not going to view it as a good customer experience. However, it’s a good experience if we’ve been helped to make a positive decision and achieve something that matches our needs – and in just a few clicks. Before, for instance, we would need to contact our bank, or lenders, and work out the best finance deal, then make the purchase maybe a week later. With today’s apps, decisions can be made immediately.”

Buy now, pay later (BNPL) has been the most obvious iteration of that with a rash of retailers and marketplaces striking up partnerships with BNPL credit providers, effectively cutting a customer’s own bank out of the equation at point of purchase. McKinsey estimates that banks are losing $10billion in annual revenue to BNPL operators such as Affirm, Zip and, of course, Klarna. Some banks, including Barclays, have decided to embed partner BNPL services; others, such as Monzo, are entering the market themselves.

And that’s because they are well aware that business will not simply come to them; instead, they must cultivate relationships and create business by mirroring customer needs. As vice president of enterprise payments platforms and capabilities at TD Bank, Vipul Lalka says being proactive is at the heart of digital banking.

“In the days of traditional banking, when branches were everywhere, people would talk about all manner of things with their branch managers,” he says. “I’ve had conversations with wealth advisors who’ve recommended barbers to their clients. That’s what creating value is about. In the early mobile days, we just offered value from a transaction perspective. Now, we have technology that creates far more meaningful context. Geolocation is an obvious example, but there are so many other contextual points,. You can blend everything to create more relevant and valuable experiences for the customer. But, I agree that, if you take the wrong approach, you may cross the line between help and intrusion.”

So, how do you find the right balance? How do you avoid becoming Big Brother? Ruby Walia, senior advisor for digital banking at Mobiquity, says banks must learn from app pioneers that have the right formula, and use this knowledge to provide similar services.

“It’s an exciting prospect for banks,” says Walia, “because they can go into spaces that are not traditionally theirs. Banks have normally waited for customers to initiate interactions. Now, they have the technology and permission to interact and create delightful experiences, be it an insight or the right offer at the right moment, and do it in a seamless way.”

Leaving ‘footprints’ everywhere

Flybits is a context-aware digital solutions company that is refining the art of customer experience and has worked with TD Bank on its app tools. “When you put raw data assets together and can understand their relevance in a particular situation, you create the context,” explains Flybits’ founder and CEO Hossein Rahnama. “And, if you look at the digital footprints we all create, both outside and inside the bank, every single one can be used as a signal to create context.”

The more of these signals you put together, he argues, the more likely you are to judge the moment correctly and present customers with what they want – even if that is unsolicited. Consumers are not stupid and we do, after all, willingly respond to those triggers in other areas of our lives.

“Just think of social media,” says Williamson. “If I’ve been on Facebook and clicked on an advert that just happened to ping up at the right time, it might prompt me to make a purchase. And, at that moment, even though I know someone has mined my data and presented the advert most likely to appeal to me to trigger a transaction, I don’t mind. That’s because it was relevant to something I was looking to achieve at that moment.”

The important difference with banking tools is that you’re not being buttonholed to accept mindless and irrelevant information, which would certainly mean a negative customer experience.

“No one wants to be used as a sales vessel and feel manipulated,” Williamson says, “which is why having the right context for a message is vital. Banks and financial institutions must know where their customers are on their journeys, and ensure that the data points they extract are of value to individual needs.”

It’s not just about forming, synthesising and accessing data, of course – it’s also about understanding governance.

“One of the great things we’ve achieved with TD Bank,” says Rahnama, “is not only better understanding the customer context, but also prioritising privacy. We build experiences and channels that make customers comfortable sharing their data and aware of how it is being used, ensuring transparency, auditability, and permission for a very good customer experience. Any bank that can do this effectively will be at the forefront of future financial services.”

Williamson believes banks need to be everywhere their customers are because the financial journey is not how it once was: “They could be having a buying or banking experience while watching sport on TV, mixing with friends or involved in any number of other activities,” he adds. “The value lies in being present at the precise moment in a customer’s life when they need support and advice. In other words: right place, right time, right service.”

A good example is how Flybits uses geolocation data in Canada to help TD Bank customers navigate a stressful part of their day – making the bank app indispensable to them for all-important stickiness, creating a payment opportunity and generating real return on investment.

“Banking and travel go hand-in-hand,” explains Lalka. “Every time someone travels, they use their card. So, we looked at the GO Train system in the Greater Toronto Area, and, using geolocation data, we can figure out which of our customers commute on the GO Train. We realised there wasn’t a good system to update train schedules in real time and notify of delays or cancellations.

“So, we connected to the Metrolinx, provider of the GO service, to receive messages from its system. Then we relay that information to TD customers who have opted in to this feature. It was beautiful. We got messages like ‘wow, now my banking app informs me that my GO Train to Oakville is 15 minutes delayed, so I can get that coffee and then go to the station!’.

“Fast-forward to last year, when all our customers were struggling through terrible times. We wondered if we could give our small business customers – mom-and-pop bakery shops, coffee shops, etc – the ability to drive offers, such as 50 cents off a coffee, a free doughnut or whatever, in our retail-facing TD Canada app that six million customers have access to. So, leveraging geolocation, we notified them when in the vicinity of a coffee shop, for instance, that they could get ‘$1 off here today’.”

Through Flybits, TD Bank has achieved the type of non-conventional product development thinking that creates opportunities to drive payments over its platform. What bank, 10 years ago, would have joined the dots between banking and alerts for frustrated commuters? But Lalka stresses that this service operated within Canada’s data privacy framework, with an emphasis on opt-in models.

“Again, it’s privacy first: customers’ data is customers’ data,” he says.

Rahnama also underlines the importance of consent, especially in a period of global sensitivity around the increasing use of AI in relation to consumers. While Canada hasn’t yet got around to enshrining algorithmic transparency in legislation requiring organisations to explain why their AI algorithm made a particular prediction, recommendation or decision based on an individual’s personal data, China introduced something like that in November. The US Federal Trade Commission has also tightened its guidance.

“The good thing is we are becoming more literate about our data ownership,” says Rahnama. “Big tech firms want to get into the financial sector, but banks are trying to use their digital strategies to remain the dominant force.”

The big difference is that customers still trust banks to manage their money and this trust factor, which is not a given with big tech, can be applied to other data, giving banks an advantage. Open banking is another area where that trust and respect are key, says Rahnama.

“This is a massive opportunity for banks, because the data is owned by the user, and they must be convinced to share it, through brilliant experiences. We’ve learned a lot When we started, the salient context was location, but now location is just one of 50 elements we use. With permission to combine location and other data, banks can act as customers’ exchange with telecoms operators, supermarkets, energy companies and so on, to offer a unified experience. These are some of the things we’re working on.”

Creating added value

There’s a challenge in harnessing these disparate data sets and making meaningful connections But it is happening slowly.

“More banks will follow the likes of TD to create similar experiences,” says Walia. “With regards to privacy, customers will ask ‘am I getting value by letting the bank use my personal information?’. If the answer is yes, we won’t see the kind of backlash experienced by some of the social media companies. Achieving the right balance depends on the quality of, and benefit from, the interaction.”

Williamson adds that this casts a wider lens on value, with people now rating experiences according to environmental, social and governance (ESG) issues. Even if they receive an amazing experience through an app, if it runs counter to ethical standards and goals they hold, they may well take their business elsewhere. And while digitisation can increase focus and relevance, banks must be mindful that they don’t become too impersonal, and too robotic, says Lalka.

“At TD, we’re bringing back the human touch to our digital experiences,” he says. “When you have the right data, and make the right connections, you are answering real needs. We don’t bombard customers with 10,000 products and expect them to figure out which one meets their needs. That’s the role of contextual data. The minute you take the wrong direction, you’d better correct it. Otherwise, it’s game over.”

Instead of referring to open banking, Lalka prefers the term ‘open data’. Customers must be responsible for opening their data and defining how it is used, he says. And, if banks and financial institutions can balance data privacy with data opportunity, and collaborate with fintech partners to find the sweet spot, they will strengthen their roles and genuinely delight their customers – leaving them with a feeling that’s as delightful as drinking cocktails on a terrazzo.