Future of Banking

Why messenger bank will become the new norm for daily banking

Bots deliver the UX “zoomers” expect from banking in 2020.

While fintech companies do not make it into the headlines as often as AI, blockchain and social startups do, it is definitely one of the most promising areas for technological disruption. Every year numerous startups emerge to “solve banking” by replacing sluggish, inconvenient or just missing traditional services with fast and user friendly ones. In the race to build the next unicorn platform for Gen Y and Gen Z finance, many contenders miss the opportunity — to leverage platforms that young consumers are already deeply attached to — the messengers. While apps are good for significant transactions and investment management, chatbots offer their own unique advantages for financial services, especially for Gen Z.

How to get started with online transactions in 2020

Let’s distract ourselves from tech buzzwords for a minute and get down to earth. Imagine the typical experience of a person, willing to start using traditional banking apps for digital transactions in 2020 (sic!):

1. You have to go to a bank branch of your choice (most “zoomers” will say you goodbye at this stage)
2. Stand in line
3. Talk to people (most millennials leave here)
4. Verify your identity
5. Apply for card
6. Leave
7. Wait for your card to be ready for weeks (even Gen X starts questioning the purpose of their existence by now)
8. Repeat 1–4
9. Receive your card
10. Download the app
11. Create your account
12. Verify ID
13. Finally, you can start sending money through a cumbersome interface and losing on cross-bank transactions fees (if you happen to know the recipient’s card number).

Now, imagine the default user experience of sending money to a friend once you’ve made it into the app:

0. Exit your primary app. This is a point many new fintechs miss: zoomers are glued to their socials and messaging. Quitting them is yet another decision to make in an oversaturated digital environment. And, let’s admit, we all have decision fatigue online by 2020, not even the most social and ‘digital native’ of us do. Now,

1. You open the bank app
2. Wait for authentication
3. Navigate to “Send Money”
4. Enter the recipient’s details
5. Submit request
6. Wait for code
7. Enter code
8. Confirm order
9. Receive confirmation

That doesn’t sound like “instant” banking. If a more swift solution is out there and it gets traction among their peers, Gen Z won’t bother with such UX and will flock to it. And messengers are the perfect platform for such solution.

They offer familiar interface while being trustworthy. They don’t require logging in and confirmations, you are always logged in, identifiable and ready. You can just type or even say “Send Josh $20 for dinner” and it’s done in seconds, not minutes. That’s the user experience “zoomers” expect in 2020.

The promise of chatbots

Service chatbots inside of the addictive social apps create a symbiosis, fueling each other’s usage. They form a stronger habit, increasing customer’s lifetime value for the company while decreasing customer acquisition costs (more on that below).

They also make finance more accessible in general. For instance, to use Zelf you just need to send “hi” to the bot and have a brief chat, and it will issue your card in seconds. Then you can send money to any friend just by typing or saying it in natural language. I envision that as conversational interfaces gain popularity among younger consumers and smart assistants make it into our homes, it will become a habit to send money to other people by voice. While it’s not suitable for big transactions and investments, where you need a digital dashboard to double-check payment information and make decisions, it’s a perfect use case scenario for small ones.

So, for day-to-day banking, you don’t really need an app. Chatbots are not just simpler, but better and we at Zelf are going to pave the way for this new mode of operations for personal finance.