Brett King of Banking 4 Tomorrow is the president and founder of Moven, as well as being a sought after speaker, renowned author and media host. He has valuable insight to offer on the trends of banking and spending and where it is going. Brett took some time to talk with us about Baking 4 Tomorrow, the future of banking and how to decrease debt.
You talk about how smartphones will soon be the center of banking. Do you think a part of the population will fight it?
There are always people that say, I'll never use a smartphone or mobile phone, I'll never join Facebook, I'll never use the Internet, I'll never use an ATM, etc. Invariably these late adopters come on board later in the cycle, but those that truly fight these trends end up being a very small part of the population, maybe 10-15%. I get asked this question all the time, though, basically, "Yes, but what if some customers don't WANT a smartphone to be the center of banking?" This question tells me that a business doesn't have a strategy for mobile and is hoping that they'll simply be able to stick with their current strategy. Hope is not a viable business strategy. The reality is that 80% of people in the US will be smartphone enabled within three years; in the UAE, Singapore, Hong Kong, etc., it's already above 100% adoption. So the only question is, will smartphones be at the center of banking...
The key to answering this question is understanding the relationship of the branch versus smartphone to the customer experience. The issue is that the branch increasingly equals FRICTION, whereas the smartphone represents reduced friction and ease of use. There are literally maybe two or three scenarios where the branch is actually not just about friction but value added - the key for value creation in the future is simplicity, and the smartphone makes that happen.
People are getting in big trouble with debt. Where do you see the credit card and the debit card going?
Credit cards are bad for debt - the core purpose of a credit card for a bank is to ENABLE YOU TO SPEND. This is counter to the mission of reducing debt or helping you to save. Our view is that credit will become a use case such as an in-store purchase, or emergency cash at a grocery store, and that the use of a credit card predicated on "airline miles" for spending will take a severe hit.
Do you think we will soon be paying for everything via our phones?
Apple thinks so, and so do we. Plastic is dumb - it gives you zero feedback, with the exception of approving or declining a transaction at the POS. That's not enough in today's world. The advantage a smartphone holds is that it can tell you what your balance is before a transaction, if there is a better deal nearby, if you can afford the purchase, and then what impact the purchase had after the transaction/event. It also is significantly more secure than cash, plastic or other physical payment forms. There is almost no downside to using the phone, and a plastic card can't compete either based on security or informational context.
How important is social media in banking?
Social media has quickly become part of the service and brand dynamic of banking. Probably the greatest benefit social media has to banks is that they can really plug into customers and get a feel for their perception of brand performance, new product experience, etc.
Your site, Banking 4 Tomorrow, has a realistic, current voice on banking. Where will banks be in the future, and what big changes do you think we'll see?
That's a huge question. I would recommend that people read my blogs and my last two books, BANK 3.0 and BREAKING BANKS, for an answer to that.
Let's just say there will be more changes in the next 10 years in banking than in the last 100 years. The bad news - if you don't like change, then start looking for a new job. The good news - banking is about to become one of the most dynamic industries on the planet, but not because of bankers.
What advice can you give someone on saving more and spending less?
Moven attacks this issue, and we think it is pretty simple. Help you understand how you are spending everyday with the simple goal of reducing your daily or monthly spend on discretionary expenses. The only real way to help someone save on a systemic basis is to get them to spend less money - banks today are more focused on getting you to spend money as easily as possible, rather than helping you really save.
What do customers want from their banks?
First and foremost, safety of their money; secondly, utility of their money (being able to pay, move funds, pay bills, etc.); and thirdly, solving financial problems as they arise. The first two are basic housekeeping issues and don't differentiate. The last has to ability to define the usefulness of a bank on a day-to-day basis. Google calls this the "Toothbrush Test" - can you build something that a customer will use more than once a day. That's what we're trying to do with Moven.
Lastly, does anyone pay in cash anymore?
A few holdouts, maybe. :)
With the exception of Japan (where increased cash use is linked to pay-on-delivery eCommerce growth), most developed economies are seeing dramatic reductions in the use of cash today. The remaining areas where cash is being used is typically for smaller transactions under $20. Once mobile payments are more ubiquitous and it is easier to pull out your phone rather than deal with trying to navigate change and notes, then I think we'll see an acceleration of the decline in cash. There are two other drivers for decking in cash use - Firstly, governments hate it because it is untraceable and is core to criminal activity around drugs, etc. Secondly, it has the same feedback problem as plastic - it can't give you context on your financial health. That's ultimately why pressure will continue on the system to further reduce the use of cash.
Having said that, I don't think we'll see cash completely disappear for another couple of decades. Sure, it will be increasingly rare and only used for off-the-grid transactions, but it will have a long, slowly declining tail.