We met up with Craig McLaughlin, CEO at Extractable, to discuss what he calls the three disconnects in financial services. His words are relevant for anyone who feels like banks and credit unions could do a better job of reaching end users.
You can see the video and read the transcript below.
What are three major disconnects in financial services?
What we tend to see in Financial Services is that there are three things that are generally holding back a financial institution to performing well in the digital channels. The first one is not having a clear digital strategy. And it's not just having a documented strategy. Because a lot of people, anybody can go and create a powerpoint doc, right, with a series of initiatives listed out. But there's a lot more to it than that, I mean for any strategy to be successful you've gotta have alignment and consensus, and for people to want to implement it they've got to feel like they were part of that process and involved in shaping it.
The second disconnect is around user experience and digital design and working as an agency in San Francisco for the last 18 years we've been helping financial services clients as well as other organizations get the most out of the digital channel. And we're pretty passionate about beautiful great visual design. But what you learn is that the wonderful, beautiful visual design is a lot more than just a pretty face. There is depth to it, and it's the right kind of experience.
Disconnect number three for us is that generally there is not enough work being put towards understanding the data analysis and the behavior of consumers inside those experiences. And it's not for lack of data, most of our clients are data rich and insight poor. It's just they're tracking the wrong things, they haven't done the work to really deeply understand what are the right metrics to be focusing on.
Those three disconnects kind of form the virtuous circle where we are setting the strategy, we are doing the UX and design, we're tracking and measuring and then we're feeding all the way back into resetting the strategy. So it never stops. And it won't ever stop.
Who is excelling in their digital strategy?
I think in a lot of ways the best examples are the pure digital banks. The ones where they are just laser focused, like the Orange savings account for so long was just our reason to be is we're going to generate deposit accounts that are going to hold this savings and we're going to pay a high rate of return on that and that's our plan. That's what we're going to do. There's alignment on that inside the organization. We work with a credit union in Canada that is starting their own bank and they're very clear in terms of this bank being a fully digital bank in terms of what the mission is for that initiative. I think the clarity on that is really a big deal and alignment so you've got all of your troops pointed in the same direction.
I think JP Morgan Chase is doing a good job. I think they're getting a lot better. I think the larger banks are finally getting it now. You see it with some of the acquisitions they have made in terms of hiring agencies, where they are really seeing that this is the future and where they need to go. And some banks, take the acquisition of adaptive path by Capital One, a 40 person team from AP goes to Capital One and now becomes almost a thousand people. So they are building out that kind of capability internally. And with that kind of size group with that kind of focus I think what we'll see is continual improvement in terms of what those experiences look like.
I would say there's a whole swathe of fintech organizations that really get it. They really understand simplicity. And they really understand their audience, so they understand a millennial customer. They understand what they want. It's really easy to judge millennial's desires around things that are kind of untrue in a lot of ways. I mean people would say "Oh they love a good app." But it's kind of a little silly, I mean who wants to have a subpar digital experience? Why is that easily judged? The idea that you're offering an experience that happens to fit into your back pocket and is incredibly intuitive and easy to use, why is that something that is unique to a millennial? I would think that's every customer and I think that the fintech organizations really have a leg up because they don't have to contend with the kind of internal fiefdoms or the way things have always been done inside of the existing financial institutions of any size. A billion dollar credit union has a lot of the same issues just at a smaller scale as compared to US Bank for example. They're not really that different.
What data points would you look at to know if users believe you're doing a good job?
I would look at a lot. I would look at surveys. I would do workshops with customers. I would walk through cocreation to say, hey could this process be any easier? Are there things we could to do make this better?
All those things will all add up to really being able to track that existing customer experience. And self service is more than just, it's a leading indicator for a healthy relationship with a customer. So if you're giving them the ability to serve themselves, you're on the right track. It's kind of surprising to me in a lot of ways. These things should really just be table stakes, but it's strange that they're not. It's weird, why isn't it that these things are just intuitive for every organization? But potentially they are hard to do. It takes a lot of work. You've got to bring the right people into bear.
Tell us a bit about Extractable.
I think we are one of the few digital agencies I would say that really cares deeply about building wonderful digital experiences, for financial services. So I think that it's interesting, we love the problem, we find it fascinating. We also love the idea that we can bring great, top talent visual designers to be able to influence experiences. That we can really break down user experiences to its core components and then be able to bolt on analytics to make sure it's performing correctly. I think we're probably one of the few agency teams you could put in front of a board of directors or a C-suite and feel like you knew that you could have confidence that what you were going to get is the highest quality potential solution. So I feel like we are generally on the more expensive side compared to our competitors, but what we bring to the table is a real commitment and depth and passion for building great experiences. So a financial institution that's out there saying hey, this absolutely has to be done right and we need to make sure we're all aligned around this solution, we tend to be a good fit.