According to the legendary Sir David Brailsford (famous for his success with British Cycling and Team Ineos, formerly Sky), it’s much easier to make lots of individual small changes than it is to make a few massive changes. Or as Sir David refers to it, the benefit of marginal gains!
So why is this relevant?
As consumers, managing personal finances has never been easy, with many of us leaving it for a rainy day! However, if it were made easier and without the need for passwords, PINs and remembering what answer you gave to that key question, then it’s likely we would all take more control. Success is far more likely to come if we are able to make lots of small, easy steps. The same can be said from an organisational point of view, as it tends to be easier to deliver incremental change, as long as it’s done with an agile approach.
The benefits of Marginal Gains
We’ve all been witness to new ways of interacting, whether it’s the adoption of biometrics to replace the dreaded login and password process, digital signatures to remove the need for “the contract is in the post”, to identifying yourself by taking a selfie and/or scanning an official document. All these marginal gains make it easier and safer for us to interact with our finances.
But engagement is all about how easy it is for something to become habitual. The lower the bar, or friction, the more likely we are to use a service, buy a product etc.
So what’s the problem?
We’ve all experienced a great digital interaction and that’s what we now judge everything else by. Think about the last time you gave up online and went to a competitor’s website because the experience was just too hard.
In Financial Services, data from Experian points to almost one-third of consumers dropping off an onboarding journey in the first 5 seconds and this rises to over 80% over time.
Higher Walls vs Open Border
So how does the financial services industry make it easy for consumers to be better informed and take control of their finances in small steps but at the same time make sure that security isn’t compromised. That’s the trade-off at the heart of the issue. InfoSec wants higher walls but the Business wants open borders.
The Importance of Digital Identity
Securely Identifying who the consumer is and allowing them to securely identify themselves is at the core of digital identity. However, the only way to make it easy for the consumer without compromising security, is to use context and signals, all of the time, to apply security. In other words, make it as easy as possible for the consumer unless it shouldn’t be! This means:
- no more passwords
- being known and being known across all channels, without having to remember the make of your first car
- being able to use your own preferred channel if you want to, e.g. WhatsApp
- sharing your information with third parties securely and with your consent
- being able to change everything without having to hang on for 15 mins to talk to an agent for 10 minutes.
All these marginal gains are technically possible today and we’ve all experienced some or all of them. The problem is that they are not widespread but that in itself presents a massive opportunity.