A couple of highlights, to refer back to & comments -
57% of consumers have have held on to their current accounts for more than 10 years, and 37% for more than 20 years. These numbers, at a cursory glance, indicate an apathetic body of consumers who is fairly satisfied with the status quo. But on second glance, a consumer might rightly ask: “Why bother?”
The “why isn’t anyone switching banks?” issue is often pointed out as one of the biggest hurdles Monzo faces. I think these people are underestimating how dramatically different user experience could be - & to a certain extent, already is.
Retail banks, after all, have embraced technological innovation at a snail’s pace.
Atom Bank has claimed to be introducing AI algorithms to automatically respond to customer requests. The machine learning technology will assess the context of a customer enquiry and respond.
In practice, the actual relevance of the responses may be questionable at least in the early phase. Machine learning algorithms work best when they have ‘learned’ from historical input data. A new bank may not have enough input data from customer enquiries to provide relevant responses.
There are two painful elephants in the room that will need to be addressed in the coming years. Firstly, banks have their work cut out to replace or transform all layers of their technological stack with newer and better technologies that are easier to maintain. Secondly, large banks have to maintain an expensive network branches that pose high overheads. Banks will need to successfully scale back their bricks and mortar operations to only provide important advisory services.
Great to see this community being acknowledged in the article too!