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Customers constructing their own products and getting services tailored specifically for them. Banking's future?

Customers constructing their own products and getting services tailored specifically for them. Banking's future?

By Gareth Vaughan

Customers constructing their own products and getting one to one service, as opposed to one to many service, from their bank are among key changes occurring in twenty first century banking, says Westpac NZ's head of product Shane Howell.

Speaking to in a Double Shot interview Howell said over the next five to 10 years banks would move more and more into non-traditional products and services.

"The UK have been there for a while with non-traditional banking products as part of the transactional bundle where you get your road side assist package, or even your mobile phone insurance," Howell said.

 He said there would be more "packaging and bundling" with a "one to one" approach rather than a "one to many" approach from banks.

"That's one exciting thing about the digital platform and data, that we can really start tailoring our products and offers to an individual customer rather than that in-out approach of traditional banking," said Howell.

"We used to benchmark against our banking peers, (but) now we benchmark against all industries. I look at the telcos very closely, I look at the airlines, it's quite a broad spectrum."

Customers developing products for themselves

Howell said Turkey's Guranti Bank was one of the more interesting global banks.

"They've come up with products where you can basically construct your own product or construct your own credit card, and you can add and take away services and product features as and when you want. That's pretty exciting and really links into that airline mentality," Howell said.

Howell said the Guranti example, where customers develop their own products, could be introduced in New Zealand but this needed to be customer led.

In terms of the one to one approach, Howell suggested "mining transactional data" will be key.

"So getting a better understanding of customers. There's a great example out of the UK. American Express and Foursquare, who are a loyalty provider, have teamed up. They have linked your credit card transactional data to a loyalty app so when you're walking down the street it knows you spend your money at the Countdown around the corner and automatically sends you an offer through a geolocation service. So you're really going to see a linking of that loyalty and data come together to provide more relevant offers than ever," Howell said.

Andy Lark's alternative take on the consumer being in control

Speaking at the INFINZ conference in Auckland last week Andy Lark, the former chief marketing & online officer at ASB's parent Commonwealth Bank of Australia, refuted the suggestion the customer's now in control.

"You'll hear people say 'oh the consumer's more in control now'. That's just bulls**t," Lark said.

"It's just that they're connected. And they're able to share and express. In fact the future is reasonably stark in this respect. You (consumers) are going to be far less in control. You'll be served what we think you deserve based on your profile, the data we've collected from you online, your choices will be narrowed by your social standing and status, for instance. This is a very real thing that is going to happen," added Lark.

Meanwhile, Howell said 24/7 connectivity was another key factor in the digital banking world.

"The bank needs to meet those customer demands and I think this always on approach, (with) seamless interactions across the channels will be key. This creation of an institutional memory where you log on online, you deal with one of our calculators, and you can basically pick up where you left off when you get into a branch," said Howell.

In what it touts as an Australasian banking first, Westpac NZ last month unveiled a new "device agnostic" mobile banking platform that will give customers access to full online banking services via any internet enabled device.

Meanwhile, Howell acknowledged that as banks move into non-traditional products and services, partnerships with entities in other sectors will be crucial. 

"You can't be an expert at everything as much as we'd all like to be, and those right partnerships will set the right people apart in the future," he said.

"I think size, scale and regulation will really dictate how fast a pace (of change) we see here in New Zealand."

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In terms of the one to one approach, Howell suggested "mining transactional data" will be key.


LOL - Genesis Energy declared it's intention (legally) to mine it's customers positive credit trail for delivery to third party credit agencies - since I wasn't offered a kickback I closed my account and moved to Nova Energy.


Yes the future of banking is online, it costs 50 times less (for the banks) to do a online transaction as appose to a branch transaction.  And over 90% of bank transactions are now online.  So what does that say about the future of banking...  One day the banks will be competing against the likes of Google, Facebook, Apple, etc and I know which companies will be able to provide better online platforms.  It will only be a matter of time before the tech giants decide to have a crack at financial services.