What if Jonathan Ive was your bank manager?
Chances are, a bank run by Apple’s design chief would be simple, effective and do one thing exceptionally well. So why do so many of us feel working with our business bank provider is anything but straightforward?
Complaints about banking services continue to increase. Whether it is the cost of provision or a lack of available funding, many business owners are frustrated.
But the biggest emerging area of frustration, in the era of on-demand data and trading tools, is now becoming more intrinsic, more fundamental: the banks’ very feature set itself.
In days gone by, banks used to own the whole of the relationship with their consumer. When the maximum imaginable service on offer was merely the provision of a current account itself, customers seemed satisfied enough.
Now, however, small business owners are used to using a plethora of third-party online apps and services to manage their stock, invoicing, order systems, and customer support.
All of the features that really help people understand their money are provided by third parties. And, suddenly, the bank account looks a lot more like table stakes - the start of a financial relationship, but not the reason anyone stays in a relationship.
Upcoming banking policy changes will accentuate this. When banks are mandated by both European and UK regulation to let consumers connect their bank accounts to third-party financial management tools - so-called Open Banking - bank operators risk sitting in the background as unloved, low-value entities.
No wonder providers have begun to respond. Some banks are jumping on the value train, beginning to add their own financial management tools - like cashflow forecasting and P&L insight - on to business accounts.
The problem is, often the offering is too limited, too stilted to be attractive or effective. This kind of feature set is not the core competency of a bank. It should be, but many banks already find themselves with attention demanded by a whole host of digital transformation initiatives. Devoting enough resource to develop the kinds of insight products small business customers now deserve from their financial partner is a challenge.
That is why I think banks should use the opportunity in the upcoming regulatory change, to embrace connectivity and integration with third-party software vendors that can help them strengthen their customer relationship.
It can be done. For its business account holders, Barclays recently launched SmartBusiness Dashboard, a way to see “the information you need, all in one place”.
How does it make good on the promise? By letting customers connect and display data and charts from a host of third-party services, like Shopify, MailChimp, Zendesk and Google Analytics.
The strategy is smart. Barclays has recognised that it does not and cannot develop software for the whole of the customer value stack. But, by allowing customers to use data from this software, within the bank-branded environment that is the very start of their fiscal story, Barclays is ensuring small businesses can extend the value they get from their account - by leveraging the data that reflects their true business actions, not just their account balance.
The same principle lays behind RBS Group’s recent decision to partner with FreeAgent. In our partnership, RBS and NatWest business customers get free access to our cloud accounting software, which we have spent years building and which would take a bank significant time to replicate.
Why does a bank want to see business customers’ data? Because the transactions flowing across the combined platform represent a resource to better understand what customers value and what products or services they may need next.
A connected and collaborative approach could allow financial services providers to provide the value that will retain business customers, whilst also allowing them to excel at what they do best.