Why I joined a Bank? (and other product musings)…

I recently joined the product team at a retail bank from Yodle (one of the top places to work in tech) more out demands of a growing family, and the fact that my 800 sq apt. in Brooklyn wasn’t cutting it.

I was questioning my move given that state of bank profitability in the low rate environment plus the thought of layers of red-tape and regulation inhibiting innovation. In addition, any meaningful consumer interactions are being fast unbundled by the likes of Venmo, Square, Apple and Google potentially leaving banks as dumb pipes.

I mean would you rather work for AT&T or Apple? I wasn’t excited about it.

It’s been five months and I’ve never been so wrong….

The Customer Need and Bank challenges

There is a reason why fintech is getting major VC funding. There are numerous customer problems to solve. Some that I am thinking about:

Acquiring Customers:

  • Why are banks one of the few remaining institutions where a customer can be rejected? When will credit-decisions evolve beyond the FICO scores to incorporate social channels or predicting potential in humans?

Servicing:

  • How will branches evolve (unless they die)? According to a recent survey of banked millennials — including myself, 38% never visit a branch.
  • How will servicing evolve balancing both digital and human? More importantly, will banks be able to anticipate our needs and steer us right?

Allowing for friction-less Transactions:

  • Will my kids ever use cash? 40% of banked millennials will be willing to give up cash if all merchants accepted credit or debit payments while Nordic countries are already going cashless.
  • Will I be able to ask Alexa to send money to my babysitter?
  • Why can’t my bank alert me of entertainment budget when I check into a restaurant on Facebook (or Foursquare)? IFTTT perhaps?
  • Will Amazon create micro-credit to consumers to continue their prime subscription or a ‘buy now — pay later’ based on transaction history?

Risk + Fraud:

Overall, having the fundamental relationship with a consumer; a deep understanding of regulatory needs and a proven business model at scale put banks in a unique position to lead via customer-centric design, analytics and innovation around unique service models and investment in data architecture.

Product Challenges

Moving to a heavily regulated, large institution has product, design and technology challenges that are both daunting and exciting, especially in the case of a non-traditional software product organization. Some initial questions/observations:

  • What is the product? What does banking truly mean? Historically we’ve chosen one bank from the other based on the closest branch or the lowest rate, not the case anymore.
  • How should we measure value delivered to customer? Unlike most (software) products, where switching costs are low, banks haven’t felt the urgency to deliver delightful experiences. Banks need to realize that customer expectations are now being set by non-banks.
  • How should one define KPIs? What defines an active user — is it purely setting up recurring deposits or engagement with bill-pay? Banks may want engagement with payment features but not at a branch. Bottom line — It’s beyond just net interest margin.
  • Can you innovate in a heavily regulated environment, a commoditized product and risk-averse enterprise? How to have fraud and legal/risk teams be your ally when it comes to innovation while managing risk.
  • Can a large non IT organization be truly agile? No matter how effective you are at prototyping, researching, or even making decisions, your development teams need to be able to write, test and deploy code fast otherwise you will be in waterfall mode.
  • How do you effectively (quickly) get sign-offs and buy-in?
  • How do you push the organization to move away from year long feature roadmaps and rather focus on the vision and experiment it’s way there?
  • How do you learn to fail fast without creating risk events for the organization?
  • How do you deal with legacy systems while still experimenting with new concepts? Is “two-speed architecture” the right approach?
  • How do you get small to scale? Micro services are key.

There are a ton of other items I am sure I’ve missed in the list above. Over the course of my journey, I will be sharing observations around human interaction with money (including mine), thoughts on product development framework at scale and fin-tech obsessions.

Now let’s get back to work! :)