Retail Banking

Retail Banking

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

The Apple-isation of banks: worship on the High Street

“In the third week of September 2014, thousands of people organised themselves into neat lines that snaked along the city blocks of New York, Seattle, and London. Sleeping in cardboard boxes, or keeping wakeful vigil through the night, they were participants in a biennial ritual”. This description written in The Atlantic , was not, as you might think, a description of some religious ritual or of the public reaction to the latest One Direction album. Rather, these words describe the release of Apple’s iPhone 6. For Apple is no longer just a phone manufacturer but is a cult-like community whose members feel part of the Apple brand and who feel they absolutely must have the latest in Apple technology. This cult nature has enabled Apple to dominate the smart phone market.

How can UK banks follow in Apple’s footsteps and transform to become an “Apple-ised Bank”? What can banks learn from Apple? Is the “Apple-isation” of banks inevitable?

There are three main things that Apple has done to develop its cult following and that a bank would need to embrace in order to be a truly Apple-ised Bank.

1. Product Innovation - From the iPhone to the iWatch and more to come

Apple have prided themselves on their product innovation, whether that be “re-inventing the mobile phone” with their 2007 launch of the iPhone or introducing the first mainstream tablet device with their 2010 iPad. Although, extreme product innovation in banking is less easy to come by, recently some banks are claiming market differentiation by being at the forefront of innovations such as: mobile banking, touch ID, name recognition, biometrics and contactless payment. Barclays is one such bank making huge efforts deemed innovative, with the bank’s PingIt App, its Digital Angels campaign, Oyster Card contactless payments, and with its recent announcement of plans for a Video banking service. Such innovations as video banking have existed for a while and although not ground breaking, these customer centric moves compared to innovations in a bank’s products or operations, help to position banks like Barclays as innovators in the eyes of the customer. Embracing technological innovations is the first step in becoming an Apple-ised Bank, and while banks today are almost in a state of ‘forced’ acceptance of new wave technologies; customers eagerly await the ‘Apple-isation’ of banks.

2. Challenger  Status Quo - me vs the rest

On top of product innovation, Apple has developed its cult following through positioning itself as a Challenger Brand. It has fostered a culture of “us against the world” through which, its customers want to buy Apple products partly in order to support the revolution. In the UK banking industry, the “big four” of HSBC, Barclays, RBS and Lloyds continue to dominate the market with 80% of customers choosing them for their current account banking. However, some so called “challenger banks” have been gathering speed, with the likes of Sainsbury’s Bank, Charter bank, Metro Bank, and Atom Bank beginning to challenge the status quo. Apple itself was once a challenger brand, during its decline in the 1990’s, and the question is whether any of these emerging banks can become the future big bank and complete the sort of seismic shift that Apple achieved? Perhaps they can but the key to this will be whether when they do, will their customer base still consider them to be a challenger? For although Apple is a multinational goliath, its customers still consider it to be a David – challenging the big bad status quo.  Now is the time for banks to undergo serious introspection, or else the emerging Fintech world of Financial Services may challenge the very purpose of them as traditional banks.

3. Store Design

Apple’s store design also fosters its cult-like sense of community. This is particularly evident in the Covent Garden store. Here, the focus is on the customer being able to experience Apple products, with friendly staff and the lack of physical check outs combining to provide the impression that you are wanted in the store regardless of whether or not you are going to buy anything. Conversely, banks typically foster a sense of confusion and of working behind closed doors. Banks need to consider how to evolve from this “close the sale” mentality to allowing customers to experience and simulate its products for a longer period of time. Such experiential shopping brings with it consequences of an increased cost of sale but it also brings with it the advantages of customer loyalty and brand recognition. Some banks have started this movement away from the traditional dour bank branch such as National Australia Bank with its “smart store” branches with widescreen tablet computers for “hip to hip conversations” with staff; however, greater steps would need to be taken to be on a par with Apple.  

Worship in a bank branch?

All in all, it is perhaps unrealistic to expect crowds of people will keep a wakeful vigil through the night to receive the next low-interest mortgage. However, banks are moving towards Apple’s example and they have time to complete this movement – that is of course, until the time when Apple decides to enter the banking world...
 


Banking Innovation

The sponsor for Banking Innovation at Capgemini Consulting UK is Anuj Kumar, Head of Risk and Regulatory Compliance Consulting. Connect with Anuj via his LinkedIn profile here.




 

About the author

Andy Wilton
Andy Wilton
Andrew is a Consultant in the Operating Model & Performance Improvement capability of Capgemini Consulting UK. He has 3 years of professional consulting experience, working across the Public, Charities and Aviation sectors. Andrew is particularly interested in how organisations’ Operating Models must change in the Digital world.

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