Where are you in the race for the financial one stop shop?

Where are you in the race for the financial one stop shop?

Hannah Duncan

Guest Author

15 June 2021

2020 was a tumultuous year, full of stress and upheaval. Around the world, workers dragged computer equipment onto their dining tables, setting up shops and schools on kitchen counters.

Yet in other ways, 2020 proved to be a time of incredible convenience. The dreaded commute shrank from monotonous miles to mere metres. Cosy living room slippers replaced hard corporate stilettos. And perhaps best of all, our in-person services went online. From doctor appointments to client meetings, most of us could go about our business with just an app or laptop. Of course, this included bank visits too. 2020 was truly the year of mainstream financial service disruption.

Customers ditched banking apps for glitch-free challenger versions

Over lockdown, financial apps popped up on smart phones faster than ever before. What’s more, they didn’t just sit there idly. People used them… a lot! DeVerre Group[1] found that financial app usage rocketed by a staggering 72%, and it’s still climbing.

Clearly digital banking is here to stay, and will probably replace in-person appointments soon. Sadly, after years of having “digital transformation” on the to-do list, many incumbents missed their moment. They failed to prioritise smart-phone service over in-branch experiences.

If high street banks had caught on faster, it could have made up for the lacklustre returns and dwindling profits they’ve been facing over the years. But the majority didn’t up their game in time. Waves of customers felt frustrated with their bank. As they lost patience with the glitchy and security-paranoid processes, the door opened ever-wider for fintech alternatives.

It’s hardly surprising therefore that apps created by fintechs were nearly eleven times more popular than those created by banks[2]. Customers don’t want friction, they want finance.

Convenience is king for customers

What behavioural economists describe as ‘micro-friction costs’ (and what we’d probably call “mild annoyances”) are fast losing banks customers. But this is nothing new. Micro-frictions plagued businesses long before the days of financial technology.

One example takes the form of a shop called “Piggy Wiggy”, which opened in 1916. You might think a place with that name sounds meek and unassuming. But as bizarre as it seems, Piggy Wiggy was one of the most fierce disruptors of the century. Why? Because it was the U.S.’s first ever self-service grocery store[3].

Before supermarkets, people walked around town to buy their weekly goods, separately from different shops. So, a simple sausage and potato mash meal would require one trip to the butcher and another to the greengrocer. Piggy Wiggy revolutionized the long-winded weekly shop into something a million times more easy and convenient. To the surprise of many, customers were willing to abandon the shops they’d been going to for generations. They accepted a more limited choice of products and even parted with personal service, in the trade-off for convenience.

The same pattern is repeating for banks. Customers will leave their childhood branches, along with all the nostalgia and comforting security they hold, in exchange for quick and easy mobile services. Glitchy apps don’t stand a chance.

Customers want a one-stop-shop for all their financial needs

Much like our 1920s ancestors became tired of strolling from service to service, we’re now getting fed up of moving from app to app. We’re about to witness the arrival of the all-in-one financial super app. The supermarket store for all our financial needs. Debit cards, credit cards, savings accounts, ISAs, investments, insurances, tax plans, pensions … the lot!

After all, our financial services are already on one phone … Why shouldn’t they be on one app?

There’s clearly a strong case for keeping all of financial information in one place, with one provider. Customers would benefit from complete transparency across all their finances and spending. From there, they can make informed changes with life-altering effects. Insights from the service provider could help to further cut down costs or increase revenue.

Perhaps financial one-stop-shops can help to ease the burden for Britain’s 8.3 million people[4] who are struggling with debt. It could help the 20%[5] of Brits who have zero savings, build up a stress-relieving nest egg. It could even prevent and entire generation from sleepwalking into a retirement of destitution[6]. This is a service which isn’t just in demand, it’s needed.

Appealingly, the service provider would be in a unique position to offer highly-personalised product suggestions, fitting the customer’s true situation. This increases profits, as customers are less likely to default on payments and more likely to stay long-term for the convenience.

The race for the financial one-stop-shop

Of course, fintechs and challenger banks have been acutely aware of the one-stop-shop need for some time now. Ask any fintech about their plans and you can be sure that somewhere along the line, they’ll mention a one-stop-shop. Whether it’s an up-and-coming WhatsApp bank[7] or an edgy payments disruptor[8], this is one theme that just keeps emerging. It seems that every fintech is racing to achieve that future-proof all-in-one status.

Some are more ahead than others. Closing the race in the UK, we have the likes of Curve and Starling – showing the rest how it’s done. With vastly different approaches, it’s clear they’re both heading for the same end-goal. Curve already combines many payment methods onto one card, so that customers can take advantage of the best offers and exchange rates each time they pay. And the fintech could be expanding its services into credit lines too, with promising new partnerships in tow[9].

Starling is another example, focusing on the small business owner and freelancer, this online bank is creating a convenient one-stop-shop for customers with partnerships. From accounting platforms to legal advice[10], Starling is doing everything it can to ensure its customers never need to leave its platform.

Other notable attempts include Hargreaves Lansdown, a leading investment platform which has added pensions, savings accounts and other services to it’s repertoire. Of course, Navos know a thing or about Hargreaves Lansdown! Between them they have more than 100 years of experience of building the financial technology behind the UK’s favourite[11] investment platform.

Where are you in the race for the financial one-stop-shop?

Customers and fintech are accelerating in one direction, towards the financial one-stop-shop. And the competition is fierce.

In 2017, Amazon’s infamous “buy with 1-click” patent finally expired, opening the floodgates for previously impossible innovation. Apple Pay, Google Pay and more are already grappling for dominance to be the most convenient way for customers to spend and store money. And it’s just the beginning. Looking over the next years, financial apps will need to offer a one-stop-shop of services, not to stand out, but just to survive.

Leveraging the best open finance and API practices helps to eliminate micro-frustrations for customers. Not only that, but it opens the potential for a full suite of financial services, all within the same simple and straightforward app.

If you need help creating your one-stop-shop of financial services, the team at Navos can do it for you. As one point of contact for all your technology needs, they make it … well, convenient.

Get started today.

Guest Post by Hannah Duncan[12].

[1] Source

[2] Source

[3] Source

[4] Source

[5] Source

[6] Source

[7] Source

[8] Source

[9] Source

[10] Source

[11] Source

[12] Source

Get in touch

Need support with your technology? Contact us for a no-obligation confidential chat.

Contact us
Back to all insight posts

Want to learn more?

Find out more about how Navos can support your technology challenges.

Contact us