Originally posted in Forbes
Technology is enabling customers to take control of their finances, that’s clear. However, I question whether customer service would be increasingly efficient if banks stopped taking an emotional role in helping their customers manage money, or if financial services remained apathetic.
Many are asking: what right do banks have to leverage data and tell consumers how to save and budget? While it is the customer’s choice to set up saving goals, it could also be argued that newer financial players are quite distant and only communicate with their users when they overspend. On the other hand, this is all part of the evolution of the financial advisor and instead of going into a bank branch to speak to someone, push notifications are now reminding consumers about how much they can spend. However, a new obstacle is expected to come into play this year. Strong Customer Authentication (SCA) could undermine the progress that challenger banks have made to ensure that their younger customers are more financial aware. The counterproductive measures that banks release could threaten the consumer experience and topple the benefits of open banking. Customers are now accustomed to using fintech applications, because they allow for increased visibility over their finances. These applications will be disrupted, and customers will lose the control that open banking promised them, resulting in friction. How will the challengers fare then? When their customers are constantly being asked to reauthenticate their data in order to sign in to a service that once told them they were in control of their data, and in turn, money. Will the industry go back to square one? – result in anticompetitive behavior, put consumers at risk of fraud and customers could return to traditional lenders, the institutions that generations before them have trusted for decades. While this has been the case, speaking to Didier Baclin, Chief Innovation Officer, Zopa, he highlighted that the “last decade of the fintech revolution has fundamentally changed the way that people bank in the U.K.
