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A close member of the family recently wanted to take advantage of the sign up bonus offered by a UK legacy bank (which shall remain nameless). Although he of course (as a family member) uses one of the new digital disruptor banks, as a student of limited means, the bonus was something not to be ignored.
The account opening process appeared to be a straightforward online application with no mention of visiting a branch as well. However once the personal information is collected, the applicant has to visit a branch with proof of identity and address and this is then ‘posted’ to somewhere else for review. The applicant then waits several days for a response. Presumably legacy banks either haven’t discovered real time electronic background and biometric verification or (more likely) their ageing technology stacks have no way to support it?
Contrast the legacy bank approach with the approach of a new digital bank like Starling or Monzo. Sign up in-app and your account is up and running within minutes, including verifying your identity. Then every aspect of the account is managed in app; exactly how a digital experience should operate.
Whilst the digital banks are typically current account centric, as they move forward this won’t matter because their marketplaces will connect customers with other financial service providers. And if you’re a customer of a legacy bank you shouldn’t be using their uncompetitive mortgage or savings products anyway – you’ll be buying from competitive, specialist, product providers.
Once new customers realise the difference between opening an account with a legacy bank and opening an account with a digital bank they will gravitate towards digital convenience. And once they are a customer the app experience becomes another transformational experience with rich transaction metadata. Why should anyone bank online using a laptop when an app is so much more convenient and immediate? My (now redundant) legacy bank account still requires website access for some transactions – not a customer centric experience.
Weighed down by legacy systems and expensive branches that drive an inconvenient engagement experience, I really don’t see a glowing future for legacy banks.
You can follow Jonathan on Twitter @sevendotzero
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