Is Human Centered Design for you?

What is Customer Centricity in Banking?

18 Oct, 2014
Colin Weir
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Dreamforce 2014 has finished. It is Salesforce’s event to bring partners, customers and staff together for a week of entertainment, motivation, networking and learning. It’s a massive event with a headline number of 145,000 people attending. With around half that number as full conference delegates the event is estimated to generate over $100m in revenues for the city of San Francisco.

Today Salesforce positions itself as the Customer Success Platform with much of the week dedicated to that story. Mostly this manifested itself through stories of how customers have been successful in rolling out the platform along with some new product announcements.

During the week I got to speak to some interesting folk around the subject of Customer Success/Centricty in Financial Services. We talked about the maturity model, what it is, how it can be measured and benchmarked. From those discussions some thoughts crystallised.

If we are to be regarded as customer centric then our customer’s success must truly be at the heart of our business, an integral part of the culture, our products and services and how our people are ultimately recognised. This is the difference between a customer centric business and a product centric business. A customer centric business puts the customers success at the centre. A product centric business puts the product’s success at the centre. We can readily define an organisation’s maturity along the continuum from product centric to customer centric, or indeed what an organisation’s compass is, by reviewing the goals people have,  what they get up to do every day and the lens they apply when making decisions. Salesforce seem to do this well. Mark Benioff the CEO often talked about “Whatever the customer wants, that’s what we should do”. Co founder Parker Harris and head of product was consistent with this message, applying the customer lens to decisions around what products should be built, how that should be done, when and with what features, applying this customer lens early and often throughout the product development lifecycle.

I was asked to compare the Salesforce culture around customer centricity to that at Microsoft, where I worked for 5 years before starting Moroku. I reflected that those at the interface with customers were generally very customer centric though there appeared to be an inverse correlation between customer centricity and how many customers an employee was serving, with customer success appearing to fall away as a focus the more customers an individual served. Once we stepped away from front line staff however, sales and service predominantly, customer centricity was rapidly replaced by company or product centricity forming the majority of peoples’ focus. So true was this in fact that I struggle to recall a customer success metric on any of the dashboard reviews.

Which brings us to the core of the matter. What is Customer Centricity and how do you measure it? How do you do this in Financial Services? Much focus is given in the industry to the Net Promoter Score, a popular scheme for measuring customer loyalty and therefore a way to measure customer centricity. But it’s not a way to measure customer centricity. And the reason NPS is not a way to measure customer centricity is that it doesn’t measure customer success and therefore it’s not actually about the customer. It is about trying to determine if or how much the customer likes you. So the lens is you, the company, or its product, not the customer. Net Promoter Score measures nothing inherent in the success of the customer. It’s purpose is to guide the business towards greater profitability by measuring how often customers are likely to recommend your products and services, i.e. your business success, not theirs.

Customer success and centricity in banking as with any industry boils down to measuring the fundamentals in the purpose of the relationship as far as the customer sees it. In this regard payments is largely simple: Customers want fast, secure transactions with competitive costs across fees and spreads. On top of that they are looking to the relationship for financial management leadership, assistance with navigating the complexities of managing ones finances and delivering successful outcomes in terms of wealth and profitability. In retail this may appear counter-productive. A product centric bank will see high interest revenue from credit cards as good. A customer centric bank may see this as bad as more and more customers rack up higher credit card debt and become less successful in managing their financial future. In response to higher credit card debt may choose to measure the how good it is at moving customers into structured debt programs once unstructured debt starts getting out of hand.

In America student loans exceed  $USD 1 Trillion. The majority of student loans are backed by the U.S. government. The creditor is the U.S. tax payer, who if students default on these loans will be subject to carry the burden of these loans. At 4% interest per annum, this $1T could generate $40bn in annual revenue. The problem is that there are more students who go to college and don’t complete their course than there are that do complete. i.e. more than half the students don’t acquire the skills they anticipated in order to pay off the debt. A customer centric bank would be measuring how well its student pay off their loans over time and how it assists its customers to build financial muscle, reduce debt and generate wealth over time. This success will generate customers for life.

A customer centric organisation will be thinking of customer’s success with its products and creating some way of measuring this performance and placing it on the dashboard. This could be done in real time or it could be calculated periodically. We all know the old adage: If you don’t measure it, you can’t manage or improve it. Chris Brown at MarketCulture has been building rigour and science into this process to allow organisations to measure and benchmark their centricity against others. This is a fabulous program with tier one organisations around the world committing to the program and it was a pleasure to catch up with Chris at Dreamforce.  As such metrics get defined they must be placed on everyone’s dashboard, measured, managed and improved upon.

At Moroku we believe that competing on purpose not price is a much more sustainable strategy. It’s why we focus on helping banks empower their customers to create financial futures. Social media has ended the days where it was possible to buy large volumes of customers through creative advertising. We all know that customers now speak the voice of the market through Social Media. Restaurants live and die by real time reviews. Customers go to Yelp, search for restaurants and read the top couple of reviews and make their decisions. This forces the owner to deliver great service one meal at a time, compete on purpose and sell the next meal based on the last customer’s success. There will come a time where Yelp for banking will yield results for customer centric banks and be brutal with those that aren’t.

Thanks to the team at Salesforce for a great conference. Motivated and Inspired.

Moroku Teams with AGSM

24 Sep, 2014
Colin Weir
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The Australian Graduate School of Management MBA program includes an internship as one of the course modules. Under this program the MBA student works with a company, to work free and part-time over 12 weeks on an issue confronting the company. The students are high calibre, typically mid-career and rising rapidly.

This year 24 students have selected this module whilst numerous companies around Sydney presented a strategic project for them to work on. Moroku’s gamification platform is developing a very good beachhead in retail banking. The strategic project proposed involves a diversification plan to help the business grow and derive additional income streams from its platform investments.

This morning, UNSW announced their decisions and awarded Moroku the privilege of having one of its students join team Moroku through the end of this year to work on the project.

We are delighted and honoured to be chosen by UNSW to mentor one of the students and gain the insights and input not only from the student by t the MBA program and faculty.

Will keep the blog updated on the progress

Gaming explains everything

14 Sep, 2014
Colin Weir
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It was approaching 1pm on Friday and I was due in the city for some afternoon meetings. Having finished off a couple of emails, I checked my watch and had good time to catch the ferry across the harbour. I grabbed my bag and headed off on a 10 minute walk to the wharf. 3 minutes out the door I was about to cross a side street when a car came hurtling out of a car park, but 2 steps in front of me, took out a white van travelling along the street and then crashed into a café on the other side of the street. It was dramatic stuff, the van getting lifted into the air and spun around 180 degrees. The dust and explosion of the crash, the drama of movies and the adventure of games.


One might be tempted to think that we are all conscious beings, the world the result of our individual interests and co-ordinated outcomes, but there’s a critical catch even more profound than chaos and that creates outcomes that none of us necessarily desire.

Less dangerous and complex than walking around driving cars coming out of car parks is the simple act of walking on the foot path. If everyone were to stand still, I could easily manoeuvre my way through the crowd. But as soon as more and more people start moving things get a little more interesting, a little more risky and a little more unpredictable. The chances for collision mount and things move from the mere tactics of walking to the more strategic. Moves are planned ahead, we look for people 4 and five away to find our route. It becomes edgy and we begin to behave in new ways, modifying our intent, beliefs and tactics along the way .

Game theory is much more than the way we design games. Rather it is the study of strategic decision making, used in economics, political science, biology, psychology and increasingly computer science. The theory’s father is widely regarded as John von Neumann who published “Theory of Games and Economic Behaviour” in 1944. Whilst the ocean wants to be flat, seeking like everything else in the universe, equilibrium, there are more subtle forces working against this plan. Waves, wind, heat, themselves seeking their own equilibrium, conspire to disrupt the balance and the world unfolds. By understanding these points of disruption we begin to understand why things are the way they are and why people behave as they do. When it comes to explaining how everything works there are few theories as profound as game theory. It is so powerful that ten game-theorists have won the Nobel memorial prize in economics.  Applying a gaming filter to our enquiry into the behaviours of people and people based systems can help us understand the forces at play when people take decisions and act.

Game theory helps us structure our approach into behavioural analysis. It defines the players of the game, the information and actions available to each player at each decision point and the payoffs for each outcome. These are used along with a solution concept to deduce a set of equilibrium strategies for each player, such that no single player can profit by unilaterally deviating from their strategy.

Whether we think about our banking customers, their journeys of challenges and the development of financial muscle or the lady hurtling across the road there is much to be gleaned. “What was she doing?”, “Why did she do that?” These were the questions everyone began asking as the car lay crumpled into the wall , the emergency services arrived and my details taken down in the constable’s notebook for a statement. The game played out, more actions were taken, some lessons were learnt whilst others were left till next time.

Darwin had some insights into how we all got here and where we may go. Chaos theory can help explain some of what happened as I embarked on a simple mission to go to a meeting. But Game Theory provides us with a most useful framework for determining the playing out of life and is why we have built a business in its application.

Emerging market banks revenue 5X growth in a decade demands new approaches to risk

3 Sep, 2014
Colin Weir
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Emerging market bank revenues have surged from $0.27 quadrillion in 2002 to $1.4 quadrillion in 2012, according to Mckinsey . Asia and Latin America have been the real growth engines of the global banking market as clearly evidenced here


Yet recent margins are being hit by risk, forcing CEOs in these markets to rethink their risk management approaches, extending from measurement, compliance, and control to include approaches to mitigate challenges on credit, capital allocation, and liquidity or funding.

McKinsey recommends that CEOs look at four primary areas for attention:

  • Creating a risk culture
  • Rethinking capital allocation
  • Improving the collections process
  • Developing innovative risk models

Of these, the last two present opportunities for the digital channel and in in particular the mobile channel to impact.

Loan-loss impairments for emerging-market banks nearly tripled to €34 billion between 2007 and 2012. Addressing this issue requires identifying actions on non-performing loans that can have an immediate impact alongside improving credit management. Along the way there needs to be a greater capacity to understand customer credit worthiness, whether that information is gained directly from customers and their transactions or sourced externally from credit agencies.

Well-designed mobile applications are not only the channel of choice for customers around the world, including emerging markets but when well-designed have the ability to gather more data about customers, build financial literacy and therefore credit worthiness as well as compel customers to take action, not only by asking them to take particular actions but more importantly guide, reward and incent them to do so.

As emerging markets become increasingly attractive to international banks looking to grow their businesses outside of highly penetrated and increasingly flat or declining growth markets in the developed world, well thought out mobile strategies will move to the forefront not only in revenue generation but also in how risk is managed and improved.

What drives our behaviour around money?

7 Aug, 2014
Colin Weir
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At Moroku we spend a lot of our time trying to unlock a key riddle

 “If financial health is so important for so many, why are so few good at it?”

The flip side to this riddle is “Why do people spend so much time on other things, things that seem to matter less?

In our search to unlock this, we spend a lot of time trying to understand the things that drive and engage us every day, influencing our decisions, behaviours, habits and actions. The fields of neuroscience and cognitive psychology provide us with a lot of insight here and reveal a core set of drivers that make us feel alive and motivated. Understanding these help us build applications and systems that shift peoples mental state when it comes to banking and their financial health and importantly drive action.

From our research, this core set of drivers are:

  • Control: Of ourselves and our environment
  • Competence: In our environment, to feel like we understand what’s going on and safely can navigate the world,
  • Congruence: To live in integrity with who we think we are and who we know we can become,
  • Caring: To care for other people and to be cared for
  • Connection: To connect deeply with others

As the internet has unfolded and banks worldwide have built out digital channels to serve customers cheaper and faster much of the risk management and connection has been lost. Gone are the days when the local bank manager knew most of his customers and were able to help guide them along. The relationship has been dehumanised, the connection gone and much of the control lost. With this banks have lost the capacity to help build competence within the service and teach people to core skills needed to budget, save, pay off debt and understand the core principles.

While most of us appear to be relatively good at short-term money management, other behaviours are more troubling. These include the lack of active and long-term savings in formal financial products, excessive reliance on credit (including to make ends meet), and difficulties in choosing adequate financial products and in taking informed financial decisions. How bad is the problem? In 2009 the US bank, Sallie Mae determined that only 49% of young respondents with a college education and 60% of young respondents with postgraduate education could correctly answer three simple questions designed to assess financial literacy.

So where to from here? We suggest thinking about these 5 core drivers when designing the customer experience for banking. We know that these drivers will pull people in, to spend more time thinking and working on the financial futures. By offering people control through competence and demonstrating that we do care and that there is a connected experience via the community inherent in the platform we may drive some new behaviours around money.