Why do some of our bank-side initiatives start with the best of intentions but get lost in execution?

Industry colleague, MARGOT HYUN shares her perspective on customer-centered project initiatives at banks and her observations around mobile payments and the consumer.

My colleague, Syed Bukhari and I were thrilled to speak to Margot Hyun on a topic which is near and dear to us — Margot’s focus on the customer in the context of payments. Margot believes that every customer interaction is an opportunity to solve real customer problems.

Margot Hyun is a marketing strategist and provides advisory and consulting services to CMOs and marketing executives of banks in the top 10 space. She does so by leveraging her financial services experience developed at institutions like Citi, Amex, Chase, Wells Fargo, and Visa, and by leveraging her digital acumen honed at interactive agencies like Agency.com (now designory.com), Organic, and Rosetta/Razorfish.

“payments is fundamentally made up of three large use cases — paying bills, paying for stuff, and paying other people”

A lot of Margot’s work in banking is centered around the consumer and payments. To her, payments is fundamentally made up of three large use cases — paying bills, paying for stuff, and paying other people. Creating customer-centered banking experiences that deliver customer value is what Margot enjoys grappling with most. She is a known speaker on payments and most recently spoke at PayThink 2017, Payments Strategy Boot Camp 2017, and is scheduled to speak at Card Forum in May 2018.

On a personal note, I have had the fortune of knowing Margot Hyun now for about 20 years. Back in 1999, Margot sent me out to South Korea on a project-management assignment for a CRM-related consulting engagement with a large chaebol when we were both at Agency.com. That assignment in Seoul turned out to have far-reaching consequences for me at a personal level. However, that is a topic for another day on another forum.

Syed and I are pleased to share our insightful 30-minute conversation with Margot in long-form.

Please note, the views and opinions expressed in this article are those of the Margot, Syed, and myself only. They do not necessarily reflect the official policies or positions of our respective employers. Examples of analysis performed within this story are only examples.

Syed Bukhari:
Margot, we know that you’re genuinely passionate about the average retail banking consumer. Especially, how the consumer navigates the complex financial services landscape: both in terms of payments as well as in terms of consumer credit. What are some of the challenges they face around payments and consumer credit today?

Margot Hyun:
Starting with personal finance, research shows that about 50% of Americans grade their personal finance literacy at “C” or lower. People are giving themselves a C! They are raising their hands and telling strangers, “I don’t get it.” It’s not about smarts; most of us are uncomfortable about money. We don’t want to think about financial planning or credit management, not until a specific need or a crisis occurs. Then we scramble and manage some “just-in-time education.”

Good news: customers consistently rank their bank as the most trusted source for financial guidance, information, and products; banks are top of mind when a financial need arises. Bad news: many banks fail to deliver on these needs. More than ever, customers have options that go beyond their bank; they are turning to content providers like Nerdwallet, to personal finance companies like Mint to learn/watch/manage or to LearnVest that adds on financial planning.

There are some things that banks don’t do well, or shouldn’t because of core competencies. This is where a partnership can be successful. For example, Bank of America partners with Khan Academy to deliver relevant, engaging, and educational content alongside their products and services. BofA doesn’t have to try to be a content company: through the partnership they are continuously able to offer fresh, relevant content, designed and delivered by product and education experts.

My clients have expressed genuine intent and backed my resources, to support financial health. Unfortunately, I have also witnessed serious gaps between that intent and execution. And often it is the bank getting in it’s own way.

Pari Bose:
Margot, can you expand on why you think there is that gap between the intent and execution?

A few years ago, I worked on a consumer-credit education project for a bank. The strategy was strong, the intent was to develop customer-centric content/tools around the concept of credit and the associated customer needs rather than focus on a specific product. However, the bank’s process and culture got in the way.

Seriously, we had 12+ senior vice presidents on multiple hourly meetings to just deliberate and agree on the concept — ”How to Lower your Monthly Debt”! Once the content was written, they had an obligation to review which was delegated to marketing and product folks on their own teams. Of course, many of the executives on their teams were not familiar with the agreed-upon strategy, and they ended up reviewing and editing the message based upon how their own business unit could be impacted by the bank’s point of view on “how to lower your monthly debt.” So suddenly, you have product owners from every credit-related product in the bank — personal loans, home equity, mortgage, credit card, debit cards weighing in on one article that’s going to be the first representation of the bank strategy on how to lower consumer debt. And suddenly, it becomes a brand element, rather than relevant and useful content on the website that helps people to lower their debt. The final content was perfectly accurate, informative, and on brand, but the messaged end-product lost all its teeth.

So the original intent was to promote advocacy and to demonstrate that XYZ bank cares about responsible consumer credit. However, in trying to ensure that such content is not incongruent with the growth of credit products at the bank, the bank ended up with bland, generic content?

Margot, thanks for sharing that story. For those of us in banking, I am sure we all have similar battle scars that we can relate to.

“innovating within an existing process and culture — tough to create exceptional work.”

A great deal of investment in time and money, a real commitment by senior management to demonstrate that the bank understood customers’ credit needs, a desire to innovate. However, innovating within an existing process and culture — tough to create exceptional work.

One of the insights we have recently heard from a strategic-design firm was that some consumers actually want friction. And that goes against the common term of frictionless-commerce where we create experiences that make it easy to spend more; almost like a gaming engagement. This firm believes that while the goal of many consumers is to be able to buy online without much effort, that ease should be coupled with guidance that helps them to understand the consequences of that purchase or the consequences of exercising their credit for that purchase.

We have worked hard to make it as easy as possible for you to “buy;” you are often “one click” away from an empty shopping cart across all device types. Customers benefit. Merchants benefit with higher conversion rates, less abandoned shopping carts. But can we go even further and allow customers to customize? To introduce pauses in their shopping experience? It’s not friction; it’s mindfulness. It’s allowing customers to moderate and be more responsible in the purchase decision. We have made great progress to reduce the customer pain points when paying for stuff; where appropriate, we can also introduce guidance and considerations.

I sense your passion for consumer advocacy. That’s really cool. We’re tailoring experiences when it benefits the business. Well, why not do the same thing in terms of benefiting the consumer?

“When a customer is making a financing/credit decision at checkout, there should be clear considerations and guidance. Not friction. This benefits both the merchant and the customer.”

Exactly! We can personalize the experience, allow the customer to self-select into a more considerate payment funnel. I recently saw several online merchants who offer financing options at checkout. When a customer is making a financing/credit decision at checkout, there should be clear considerations and guidance. Not friction. This benefits both the merchant and the customer.

Our next question is around mobile payments. Recently, Pari and I were with a large payment network. We were speaking to a C suite executive, and he believes that after years of trying, the industry still has not been able to convince the U.S. consumers to adopt mobile payment solutions en masse. He had a point, right? Since 2008, almost everyone in our space has been saying — THIS will be the year of mobile payment! Arguably, this takeoff never really happened. Tim Cook recently said that he had predicted that Apple Pay would do much better on their adoption.

Margot, we are really curious to know what you think about creating adoption for mobile payments?

“Mobile pay, for your average consumer, is still largely a solution in search of a problem. Most consumers don’t see an issue of pulling out their card for a point-of-sale purchase. The value message of “speed and convenience” is not resonating.”

Sure, almost everything we discussed today has been about solving customer problems and making customers’ everyday lives a little bit easier. I think mobile payment, for the most part, is not solving a problem/pain point. I say this as a person who uses her Apple Pay all the time.

Personally, I love to count the number of commerce transactions I can have using my Apple Pay! But, I do this for kicks, not because I don’t carry my wallet and backups. Mobile pay nerds are an exception — and still limited to the major cities where acceptance is much higher.

Apple Pay, the most tenured “pay” has the largest customer base — just under 30% of Apple product owners have activated. When you look at customer research, much of the activation — the trial was incentivized by the banks: ”Get $25 to Activate” and repeat use is very low. The recent growth of the “pays” is not necessarily from trial at point of sale with a phone or watch but through in-app purchases.

Samsung Pay is the only pay to offer a rewards program — accruing rewards with every transaction. Customers love rewards! But the program hasn’t been a real differentiator; it hasn’t accelerated their adoption in a way many of us hoped.

In contrast, Walmart’s mobile payment adoption curve is very very different; Walmart solves an actual customer problem — couponing. By integrating coupons/discounts with their payment, they solved a problem that no one likes — missing out on a discount.

Mobile pay, for your average consumer, is still largely a solution in search of a problem. Most consumers don’t see an issue of pulling out their card for a point-of-sale purchase. The value message of “speed and convenience” is not resonating.

Margot, digging a bit deeper, what would mobile payments have to solve for it be truly adopted by the masses? Are you talking about a value that many consumers do not see today?

“Mobile pay has yet to convince the customer that the value: secure and convenient is really that much greater than their current pay solutions.”

Marketers like to use carrots to incentivize new behaviors. All the “pays” in partnership with the banks offered sweet deals for trial. But as I mentioned earlier, repeat use is very low. Changing customer behavior is really hard when perceived utility is low.

Mobile pay for in-app (mobile) purchases continues to rise — the utility is high. It removes the hassle of entering payment information and offers a layer of security. And with biometrics, the hassle of a secondary sign-on that the current wallets like Visa Checkout and PayPal require is removed.

Mobile pay has yet to convince the customer that the value: “secure and convenient” is superior to their current pay solutions.

We can all see why Starbucks and Walmart have seen success. It is because of the utility. Starbucks claims 30% of their transactions are through their Starbucks app. Walmart is about to match Apple Pay (29% and 25% respectively among smartphone owners). It’s not because people think it’s cool to use mobile pay at Walmart. It’s because they’re getting all their discounts.

Margot, thanks for your time. It has been a great interview.


Syed Bukhari: Syed is a former Gartner, PwC, and JPMC executive who advises leaders at top 20 retail banks about experience-led digital transformation and innovation. He’s passionate about consulting and uses all his God-given wit, grit, and personality to make his clients look good and be successful. When he’s not on plane or at an airport, he helps his wife with her pet travel startup called SnubStub and reads a lot about child psychology and early education. Connect with him on Linkedin.

Pari Bose: When Pari is not being a father of two very busy daughters and trying to get his resting heart rate below sixty, he manages to dabble a bit in digital banking and payments. A resident of the beautiful town of Fair Haven on the New Jersey Shore, Pari draws upon his product management and operations background to take ownership of strategic directions and operations of digital customer experiences for banks & credit unions. Pari is almost always reachable by LinkedIn.

Copyright 2018 Syed Bukhari and Pari Bose. All rights reserved.