I couldn’t help but wonder what traditional banks mean by going digital or by a “digital-only” bank account. This week, Canada’s Equitable Bank launched a digital-only subsidiary that offers a savings account accessed online and via mobile phones.
The EQ Bank Savings Plus Account will allow customers to pay bills, transfer money to friends and family. Well, it’s hard to see where the innovation is. The account promises to have a savings goals feature (meaning PFM) and promises an everyday interest rate of three per cent, far better than the large Canadian providers offer (good old competition). The justification for this “new account model”? The Canadian Banker’s Association data shows that 55% of the population does banking online or via mobile.
“Each year, Canadians are leaving billions of dollars of interest on the table. Our goal is to ensure they get the most out of their hard-earned money. Without the cost of traditional branches, we can focus on our customers first, helping them achieve their savings goals faster.” – Andrew Moor, CEO, Equitable Bank
In the digital age, is old new again?
The first thing that comes to mind is an article I read in August where a bank executive was going over innovation and technology. The bank executive and banks in general still have this cynical approach to the 21st century digital landscape. This executive took on a very simplified view of mobile banking: „Mobile banking is simply putting your old Internet or online-banking onto your mobile as well“. In reality, mobile banking has evolved into „digital banking“. Thanks in part to the evolution within banking due to increased competition. I see the same parallel with what Equitable is trying to do. So does going digital mean migrating a savings account “online”? This bank executive goes on to say … “on the subtle (and perhaps cynical) side, what the banks have succeeded in doing is getting you, the customer, to do all the work (previously done by bank tellers or trusty bank clerks) and the banks are charging you for the ‘privilege’ of doing their dirty work.” Is this what Equitable is trying to accomplish?
In my opinion, what Equitable has accomplished to do is just tinker with a legacy system hoping that the statistics will favor them. Let’s face it. If 55% of the population does banking online or via mobile, they are sure bound to attract customers.
What about the 21st century digital customer?
What Canada needs is a lot more challenger banks which have one thing in mind! Delivering something the digital customer wants. What is happening here is that banks are too focused on solving their problem (which is fewer customers) rather than solving the customer problem (offering a product for the 21st century digital customer).
What do you think Equitable and other banks are trying to accomplish?