Contextual Banking in a Digital Lifestyle

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Imagine a bank customer, Maggie, planning and researching to buy her first home. On a fine Saturday morning, while exploring new biking trails with her friends, she passes through a neighborhood she really likes. She quickly asks her phone mounted on the bike, “Hey Bank, can I afford this neighborhood?” The Bank App replies, “Sure Maggie, increase your budget by $80k…” and then sends a detailed note on the suitability of that neighborhood based on factors such as schools, crime, walk score, taxes and weather.

This is contextual banking. The customer experience is being re-imagined to be context-aware, seamless and secure through innovative use of technology. The personalized experience caters to the expectations of digital natives as they blend these technologies naturally into their lifestyle.

In Bank 3.0: Why Banking Is No Longer Somewhere You Go But Something You Do, Brett King said, “The future of banking is all about context.” If enterprises adapt such context-driven solutions in the brilliant world of always-connected customers, a dominant advantage can be gained by capturing and thriving in the last mile of their customers’ digital experience. By rethinking existing customer interactions and redesigning integration mechanisms, higher levels of customer engagements can be designed. Such smart channels would unlock greater value to customers and foster further brand loyalty to enterprises. In this post, I’ll present a preview of a digital-connected experience with sample last-mile touch points.

But first let’s analyze what the Bank App has done to respond to Maggie’s query. First, it’s voice-enabled and can understand natural language. Second, it created an effective mashup by retrieving and processing four distinct pieces of information to provide that insightful response: geolocation, market residential prices in that location, the financial state of the customer, and the home preferences she has preset.

As devices become smarter, our interactions with them change. Devices don’t just respond to our actions; they can initiate conversations and actions when they learn that their users are active and can be approached. This provides a unique opportunity for banks to interact with their customers in ways not previously imagined. This always-on mode allows banks to be more vigilant on behalf of their customers. They can prompt on certain activities, send them reminders, and keep their customers abreast of everything happening financially.

These new digital solutions can be an on-demand, in-context financial advisor. When banks become their customers’ friend and engage them on social media, they can get to know their preferences. This gives banks an opportunity to tailor their services to each customer’s taste and financial condition. How cool would it be to have a bank obtain a solid, deep understanding of your financial situation and life goals and then create a path to those goals, perhaps encouraging you each day to work toward them.

This type of always-on, up-close involvement of devices can be unsettling, however. And regulation may prevent enterprises from gathering certain data such as geolocation. But regulations will loosen as people adopt these new information oracles. Virtual assistants will begin permeating day-to-day activities like cooking, entertainment, fitness, and so forth. Why should financial well-being and banking transactions be different? Banking should (and will) become intimately integrated into our financial planning.

Here are two ways banking can be integrated into our lives: in our living rooms and our social lives.

Bank@Home

In the era of branchless banking and virtual banking, having a bank in a customer’s living room with the ability to interact and respond takes the customer experience to the next level. Employing voice-driven, smart-home devices can be an effective channel for basic banking services such as balance inquiry or bill payment.

Friend@Bank

Can a bank be a friend of its customers? Why not? Using Facebook’s Messenger Bot, banks can create banking bots to provide transactional and advisory services to their customers. Banks can learn the likes and dislikes of their customers, distill those into customer preferences, and use them to help customers create and mold their financial goals and planning.

In two upcoming posts, I’ll expand on the use cases and solution architecture for the Bank@Home and Friend@Bank concepts.

Post Date: 11/28/2016

Mahesh Alampalli

About the author

Mahesh Alampalli is CTO at Texas Department of Transportation (TxDOT) with responsibilities to advance TxDOT's technology-based mission. A deep generalist with more than two decades of strategic consulting and product management experience, he brings with him a unique blend of strategy, leadership and technology skills. As an advocate of lean principles, he formed and leads NTT DATA's Community of Practice for DevOps and Continuous Delivery to bring together practitioners on lean, agile and release automation.

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