First Friday, Innovation in Banks
I was interested in attending this talk because I feel that banks are very far behind with technology. A few weeks ago I met someone who works as part of a UX team at RBS (I didn't even think banks had UX teams) and it made me want to find out more about what they're working on and what sorts of things are holding them back.
I also read some of Aden's blog posts before coming, and they are really interesting, such as Please stop calling them dumb pipes and The Problem With PFM (Personal Financial Management Tools). I use FreeAgent which takes my bank statements and turns them into charts and helps me work out how much tax I owe. It has proved to be vital to the success of my business, but I'm not with one of the banks that lets me pull in a feed of my statements. This means I have to log into the bank's website every week to download transactions manually, and they don't make it at all easy. It takes a lot of time, time which I'd rather be spending doing proper work.
Aden explained the difficulty banks have getting things live, like needing 16 signoffs just to set up a twitter account. Innovating in a bank is very tough. Their IT systems evolve like Katamari Damacy, "a magical ball that allows anything smaller than it to stick to it and make it grow".
Some of the systems banks rely can be very old, so it can take a very long time to make even basic changes. The people who built the system may not work there any more, and it can cost a lot of money to bring someone in who understands how the system works.
The efforts made by the money management software company Simple haven't gone unnoticed by the rest of the sector.
Joshua Reich from Simple speculated that it's in the bank's interest to make customer finances confusing.
"They make money when customers make mistakes, so it's not in their interests for customers to understand their finances"
Aden was less cynical, and said that the sector wants to make things more straightforward for customers. They might miss the mark sometimes, but they're not intentionally being evil – he says!
Queing for an interface
He pointed to the example of people queueing for an iPhone, and asked "Why is it easier to buy things with my card than to check my balance?".
Looking at an online bank statement, it doesn't give you any more information than a paper statement does. The data shown is still heavily constrained by the paper world, but we can do so much more than that.
Working with bank data
One constraint someone trying to build something with the bank's data will face is working with the data itself. Aden said that mobile apps pull data from ATM networks rather than the bank's website because their data is easier to work with. These are issues that could take years to resolve.
HSBC's secure key was brought in to cut down on fraud. It excelled at that, but the negative was that it created a lot of issues for customers logging in. This highlights the point that when setting success criteria, make sure it takes into account the whole picture.
Aden mentioned an Obama administration initiative called the National Strategy for Trusted Identities in Cyberspace. It looks like a very exciting proposal that could change the way user logins work.
Bank login systems are very secure, so they could potentially be used to help people log into other sites. Maybe one day they could be used to enable people to vote online.
Aden then specualated on a scenario where a bank ties klout scores to the mortgage rates it offers customers. It wasn't a serious suggestion, just something to make us all think!
Aden then mentioned Aral's HSBC bookmarkelt app. Aral created it out of frustration after setting up FreeAgent, because he could only print HSBC's old statements, not download them. He wrote a script that turns the print version into a downloadable version. This made me laugh because I was with him in the coffee shop while he was working on it. He built it in 4 days. Aden said how impressed he was with it, and joked it would have taken 4 days just to schedule the meeting to talk about building it.
At the end of the talk, I asked Aden what incentive there was for banks to invest in technology. All of their online offerings are as bad as each other (in the UK at least) so there's little motivation at the moment to compete. I gave the example that there is a cost to banks to transfer money across accounts. By making it easier for customers to transfer money, they're more likely to do it more often which costs the banks more money.
Aden responded by saying that the banks will just have to make their systems better so that it doesn't cost them as much money to deal with the transfers.
It's encouraging to know that people like Aden are working behind the scenes on good things. Banks have a terrible reputation with the public at the moment, so I hope this means they're doing all they can to act on the things poeple like Aden recommend, and make it easier for customers to keep track of their money, not just make it easier for them to spend it!
Aden is @aden_76 on twitter if you want to find out more about him.