Technology is reshaping the way banking services are delivered. Chief operating officer Tony Prestedge discusses with Andrew Tunnicliffe Nationwide Building Society’s latest offering, and what he believes the short to mid-term future might hold for today’s bank and its customers.
It's time to pay. That's not supposed to read as menacing as it does, but it is a reality one could be witnessing in just a few months. To shed some light on that, picture the scene: you wake up in the morning, get your focus and lift your watch from the bedside table. Not only does it tell you what the time is, but it notifies you that the mortgage, credit card or other bills may be due.
It's a reality that, just a decade or so ago, would have seemed impossible, but it's almost with us today.
"I'm massively excited about wearable technology," says Tony Prestedge, Nationwide Building Society's chief operating office. The bank recently announced it had added a new function to its mobile banking app which will allow customers to view their account balance in real-time via their Android smartwatch. With more than 20 years of experience in banking and financial services, he has seen the sector change a lot during his career, but, arguably, today's pace of change is unlike any other. "The past two years have seen an increase not just in the velocity of change, but the nature of transformation in a way I've never experienced. Customers are demanding things of their financial institutions they could never have imaged themselves two years ago."
Prestedge is discussing this at an exciting time - just months after he'd helped launch Nationwide Now, an offering that, for the moment at least, sets the society apart from its competitors. First revealed in April 2014, the project brings specialised expertise into the branch by way of a video link. It means customers across the country will ultimately have access to experts, primarily mortgage, within their branch where they may not have before.
"We have a physical branch network of approximately 700 in the UK, but we were struggling to cope with the capacity," Prestedge continues. "We had more business demand than we were able to fulfil. It wasn't that we didn't have enough sites; it was the ability to get expert resources in investment planning, mortgage advice or banking products to those sites efficiently and without downtime."
Prestedge explains how Nationwide looked at a business operating in Canadian healthcare, bringing medical support through general practitioners to far-flung parts of the country where the tyranny of distance was an everyday challenge. "We took that idea, and came back and said why can't we do the same in financial services? How do we take 700 branches, increase their ability to advise, bring expertise and improve servicing through the use of new technology?" he asks.
Now is the time
Through the service, customers - or members - are able to book appointments either online or over the telephone. They will be able to select the time and branch they want the meeting to take place, and the type of expertise they are looking for. When they arrive at the branch, staff will be ready with the necessary paperwork. Members will be offered a hot drink, told what to expect and introduced to other members of branch staff, and then the remote adviser. "The great thing is, once the advice service is complete, we can print any necessary documentation and branch teams can help the customer complete that transaction," Prestedge explains.
"Despite the fact it's a remote relationship, it is completed on a one-on-one basis. It means you can build expertise centrally and increase your capacity, yet also retain the fact that we are already clearly number one on service for any major high-street financial services business. What this does is add a layer of choice for the member."
Since its launch, customers have been extremely positive about the service Prestedge claims. "I'm the COO of a business and, in some ways, I'm paid to be cynical," he says. "I was concerned that customers would find it impersonal; I couldn't be further from the truth. Customers really like the fact they're still welcomed by a colleague in the branch; they're still given a cup of tea; they get that friendly welcome. Yet, by virtue of the fact we've been able to build real expertise centrally, what they're then getting is advice from experts that can constantly be focused on single-product domains or single areas. They're saying to us they're getting the best of both worlds."
As the service is so reliant on technology, Prestedge is keen to stress the importance of allowing customers to strike up personal relationships with their advisers. Before rolling the service out, the institution carried out substantial testing to ensure it met customers' needs. "This feels as though you're having a really personal relationship; it just happens to be 100 miles apart. What you see is customers getting really engrossed, learning in the way you would in any personal conversation," Prestedge says, and he even recalls one occasion where a customer stood and approached the screen at the end of the consultation and attempted to shake the hand of the adviser. A humorous anecdote no doubt, but a perfect illustration of the personal service they felt they'd received.
Around the corner
The service is a real breakthrough in a banking environment that has been under scrutiny to perform better and with a great focus on its customers' needs in recent years. It will no doubt lead other traditional high-street retail banks to look even harder at the next big thing in customer experience. Yet, Prestedge believes, this is just the beginning.
"I think we've only just started. What we've done is take really good quality video relationships into the branch environment and integrate it with other technology. We will unquestionably, over the next 12 to 24 months, take that into people's homes and through their mobile technologies," he says. Beyond that, he's keen to stress, this service will not solely be used for sales purposes, such as mortgages. He believes, in time, the society's customers will be using it for servicing roles, envisaging scenarios where a client may be abroad and have lost or had their bank card stolen, and be able to have a face-to-face conversation with an adviser - and it doesn't stop there. "I also think you can imagine video technologies going on to ATMs so you can actually see conversations taking place in the high street," he says.
Nationwide has been embracing technology for many years now. It boasts the highest-rated app in stores and is continuing to increase its customer reach through new technology. With 15 million customers, it needs to ensure it is able to cope with day-to-day demands - something it seems to be doing. In the past 12 months, the number of those online has grown by 21%. The volume of new business origination through online channels has also grown by 27%. "Imagine that," says Prestedge. "Growth of almost a third in a single year. Our online payments have grown by 23%. So, within a 12-month period, we've seen a fifth of our relationships, of our new business origination and of our transaction volumes, shift not necessarily from one channel to another, but grow through the entire infrastructure of the organisation."
Digital channels are helping, he argues, to increase reach, brand strength and ultimately the way they engage with customers.
Prestedge is very excited by what we might see in the future. Remember the smartwatch? Well that's something we can, with all sincerity, look forward to. The financial-services veteran sees the pace of change quickening further still, bringing with it exciting opportunities with wearable technology as, perhaps, the next frontier. Smartphones, already providing banks and their customers with new ways to interact, will be joined by smartwatches, and there may even be a place for augmented reality devices such as Google Glass. Yet, as Prestedge acknowledges, it won't be for everyone. "The fantastic thing will be that technology will open choices so that customers can decided themselves how they want to transact," he says.
"What we're seeing today will feel like a snail's pace in 24 to 36 months' time," he concludes. "You're going to start to see financial, retail and purchasing relationships integrate into consumers lives in a way we can't really yet think through because the technology has not matured, but it will, at a rate that we can't imagine sitting here today."
Get smart: the latest Nationwide applications for modern hardware
Nationwide's members, who have downloaded the mobile banking app (for Android), can now access their real-time account balance on their Android Wear smartwatch. This innovative, first-to-market move, available for download now, adds more ways for customers to manage their money anywhere, anytime.
The mobile banking app has many other additional benefits such as the ability to make payments, transfer money, manage overdrafts and open savings accounts quickly and easily.
"Providing customers with a variety of ways to manage their money, whenever and however they want is a priority for us," explains Tony Prestedge, chief operating officer at Nationwide. "Giving those members who want and have the technology the ability to check their balance on their watch provides them with even more choice as to how they interact with us whether it is online, through an app, face-to-face or over the phone. Our customers have the peace of mind that they can do business with us on their terms, not ours."
The launch of this new smartwatch feature follows hot on the heels of a number of customer focused developments from Nationwide, including:
- Nationwide Now, which gives customers quicker and easier access to a mortgage appointment. It uses a fast, high-definition video line so the customer interacts with the adviser as though they were in the same room.
- Becoming the first high-street provider to launch '24/7 Twitter' to answer customer questions and help resolve questions day and night.
- Becoming the first organisation in the UK, in conjunction with Visa, to offer V.me, a new digital wallet designed to make online shopping more convenient and secure.
Updates to the mobile app have introduced two new innovative features:
- Quick Balance: allows customers secure and immediate access to their account balance, helping members keep on top of their finances anytime, anywhere and at the touch of a button. The Quick Balance button on the app has been used more than 12 million times since the launch on 4 June.
- Impulse Saver: encourages customers to get into the habit of regularly saving small amounts and supports the call to improve the UK's savings culture. This service allows customers to transfer pre-configured amounts from their current account to their savings account with a couple of taps. Since the launch, more than £3.5 million has been saved through Impulse Saver.