I’m a bank account kinda guy

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By:
Peter Lee
Published on:

Banks are exploring new and radical ways to offer more to their clients through digital platforms. But they shouldn’t forget the bedrock of banking.

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Back in the early 1980s, when I was at university engrossed in Shakespeare and romantic poetry, the cultural highlight of my week was a TV comedy show called ‘The Young Ones’, about a group of hapless students sharing a filthy and dilapidated house. 

It showcased rising stars of alternative British comedy such as Adrian Edmonson playing the deranged punk, Vyvyan Basterd, and Nigel Planer as my personal favourite, Neil, the mournful drippy hippy who lived on lentil stew and took a degree in Peace Studies.

I grew up with them. When I was making my career in financial journalism, Edmonson and Planer took the man’s dollar reprising their characters in TV adverts for banks. It made us spit with fury, but these ads were almost as funny as the original shows.

Vyvyan turned out to be a bank account kind of guy after all, even though he ended up head-butting the wall of his NatWest on discovering he needn’t have shaved of his red Mohawk to open one. He just needed a pound and a reference. 



Later, as the proto-yuppie trader shouting into his brick-sized mobile, a shiny suited Vyvyan bumps into now smartly metrosexual Neil pushing a trolley-load of organic vegetables round the supermarket. Neil patiently explains that you can make money and do good at the same time with (if I recall correctly) Friends Provident. 

   

When Vyvyan squawks: “How?”, Neil shrugs, passes him a business card and confides: “Talk to my bread head.”

As Euromoney’s tour considering pitches for this year’s Awards for Excellence meandered through executive suites of banks in New York, London, Hong Kong and beyond, this summer, Neil and his bread head for some reason have never been far from my thoughts. Banking is going digital. It is just at the start of a journey leading no one quite knows where. 

The idea of having a ‘bread head’, an expert who can handle all our money worries for us has exerted a powerful allure for decades, even as banks hollowed out their branches, routed customer queries to universally detested call centres and programmed chatbots on their websites. 

The thing about money is that it does not operate in isolation. We pay it for goods and services. While price comparison sites might help identify the best deals on broadband and mobile phone providers, say, or on energy and water utilities, these deals often change. People want to choose the best provider, sign up and be done with it. Not many of us have the time, patience or inclination to repeatedly take up the best short-term offers, then get out of them before higher rates kick in and shop around elsewhere for new providers, mostly because the associated rigmarole around bank standing orders is so intimidating and off-putting. Our priority is ensuring continuity of supply. 

The next iteration of digital banking will be to devise what some genius with a marketing degree from Scumbag college (Neil’s and Vyvyan’s alma mater) will call the ‘bread head app’. It will do all of this for you. 

I regularly speak to a number of banks on both sides of the Atlantic that are already beyond the proof-of-concept stage and trialling prototypes for this, with a range of business models predicated on taking a chunk of the money saved for customers by switching their utility supply contracts and associated banking arrangements over the course of a year.

In March, through an $11 million series B funding round, Citi Ventures took a stake in Clarity Money, which analyzes its customers’ regular bills and works with a company called Billshark to negotiate better deals, taking advantage of discounts and coupons a regular customer may have missed. It charges 33% of any savings it negotiates. 

Clarity Money, which launched at the start of this year, undertakes not to change the terms of an account by adding, removing or extending a service to capture savings. So far, it has made progress working with the likes of Verizon Wireless and Time Warner Cable. It also has a service where customers can identify regular subscriptions for Clarity Money to keep an eye on and ones it can just cancel.

This all looks very exciting; a first step into a new world. It seems to be banks and fintechs finally devising apps that don’t just cross sell or up sell their own products, but that help customers cut their bills with a grown-up conversation about sharing the financial benefits.

While not wanting to sound like the morose, tofu-pancake-chewing naysayer, Neil, I am worried. The banking industry will need to get right on top of the permissioning of all this. The regulators already know that bank customers sign up blind to digital services, never having read the online terms and conditions they say they have. If anything goes wrong with this kind of service, it is at the banks’ door that complaints and claims for compensation will land. 

And there are two parties to every standing order. It may be that his gym will negotiate better membership terms, but it will want to speak to Neil, not to his bread head.


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