Today’s shopping takes place mainly via credit and debit cards that are linked directly to banks. Stores use details from your bank so you can buy online on the Web and through branded apps. While newer mobile payments from Apple, Google, and others are starting to cause disruption to this, basically the model is the same. Details are provided to a third party who brokers the sale when sufficient funds are available to cover the purchase.
This is causing some to view branches as increasingly irrelevant. Why? Because mobile transactions like payments and deposits (you can take a picture of a check while lounging at your home now, for example) are removing the reasons consumers need to visit a bricks-and-mortar bank.
Scaling up service to change the model
Financial institutions are missing out. What if institutions with 18th century business ideas took an Uber-like approach to innovation? Instead of a collection of apps on a customer’s phone, what if there was only one? And what if that app was for the consumer’s bank, not a store?
Have you heard of UberEATS? This service delivers a curated menu for set times during the day from specific restaurants in locations where Uber operates. The food comes to you because it’s already in the car being driven around. It’s not cooked and delivered to order. Customers choose from the available selection and pay using the same cashless payment system that has become familiar to Uber users.
Imagine banks operating like UberEATS. You simply tap your bank app and what you purchase is readily available, at the store the purchase is from, perhaps even with a driver—or drone—to deliver it to you. This service would allow customers to purchase before they pick up their goods at a scale never achieved before.
I’m not talking about your morning cup of coffee as you are standing in line at the nearest Starbucks. Why not provide consumers the ability to choose and pay for their lunch while they are brushing their teeth before leaving for work? Or turn that mid-morning water cooler discussion about the newest shoes into an afternoon delivery in time for a ladies’ night out? Yes, there are thousands of companies offering these services. But there is not one company offering them all.
Streamlining payments will change society for the better
With Uber I never need to remember a phone number or worry about whether the cab company takes cards or what cards they take. I get the service I want by touching one button.
From a consumer’s perspective, imagine making every purchase using only one button. No more searching for the right app when you are in a store, or updating countless databases full of billing information, managing many passwords, and multiple shopping lists. You have one customer experience no matter where you shop and have insight into your own account finances.
From a business perspective, imagine the convenience of being able to reward conscientious shoppers and loyal customers because information from every transaction is captured. Banks will know a whole lot more about their clients too.
Is this possible? I believe so. It is possible because we are moving to a new stage in technology—Location-as-a-Service (LaaS). It’s beyond simply understanding where consumers live, work and shop to define supply and demand. LaaS uses geographic context to understand what’s needed where, how it changes over time and space, and how to enable business opportunity.
Geographic context provides insight into the billions of purchase transactions that take place every day. Through understanding the space-time cube of retail (where is something purchased and when), businesses can identify not only what is where and who needs it, but also market gaps and business opportunities.
Geographic proximity—people in one particular store, transactions in a particular market or people traveling through an area—are all parameters that can be fused with social streams and customer loyalty information. Incorporating engagement information found in an app such as likes, changes to wish lists, and purchase reviews, can continue to refine the context.
LaaS is unique in that it’s scalable from regional—what’s New England buying?, to hyper-local—what’s hot in Back Bay? It is also time-based, down to the minute. Targeting customers can be refined so services and goods can be localizing to a particular location and moment in time (a large number of people are ordering Pumpkin Spice Lattes at The Grind Coffee Shop at eight o’clock in the morning). Everyone in the business can benefit: branches, marketing, customer services, wealth management, etc… Everyone, everywhere.
Creating a singular banking app that can be used by consumers wherever they shop. A singular banking app is also a road map to a greener and more profitable model of supply and demand. This is the type of commerce we need to transform banking.