Spring musings on UK banking innovations

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21 April 2015
Daniel W. Latimore
One of the great advantages of being a Celent analyst is that we’re able to look at banking advances around the world and share what we learn with our clients and readers. This week I’d like to focus on a few interesting developments in the United Kingdom. The unifying theme this time around is innovation linked only by geography.
  • Barclays’ Blue Rewards
  • Nationwide NOW: remote video advisers
  • Lloyds’ plain English terms and conditions
Barclays Blue Rewards The headline attraction of Blue Rewards is that customers can earn £180 back from Barclays. The catch? Consumers have to pay £3 each month to participate. This isn’t bad, per se: it insures that customers actually have some skin in the game, some incentive to participate so that they don't frivolously sign up. To save you some math, the net benefit to the consumer can be up to £144, or about $215. If you pay in at least £800 each month into your current account, process at least two direct debits, and are enrolled in online banking, you’ll receive £7 off the top as a “loyalty reward.” A mortgage through Barclays gets you another £5 each month, and if you insure your home through the bank, that’s another £3. Naysayers snipe that consumers can get better deals elsewhere, and that you have to have a lot of products at Barclays to reap the full benefit, but isn’t that the point? Barclays is explicitly tying rewards to the behavior it’s trying to incent, something that other banks should consider. Barclays, incidentally, is the only bank that I know of with behavioral economists on staff – who am I missing? Betterment has a behavioral economist who’s a Barclays alum, according to LinkedIn, but it’s not a bank. Nationwide NOW The UK’s Nationwide Building Society launched a high definition video link service called Nationwide NOW in April 2014. Initially piloted to link remote mortgage advisers to customers in 61 branches, it helped more than 3,200 people with mortgage, banking and financial planning. Waiting times, particularly for rural customers, have been reduced from weeks to days. In a press release dated April 20th the institution announced that it was introducing the scheme to 100 more branches, with plans to roll the service out to a total of 400 branches by November of this year. Nationwide proclaims that it is the largest offering of this service of any FS company in the world, based on the number of terminals. It’s also been willing to tweak the service delivery: the remote specialist will offer the customer a cup of tea at the beginning of the conversation, and a local employee will bring it in, making the whole interaction seem much more personal. Lloyd’s video terms and conditions In a two minute and fifteen second video on YouTube (which some are calling an animated infographic), Lloyd’s simplifies the terms and conditions that the vast majority of customers ignore, sometimes at their peril. While still not riveting, it’s a whole lot more accessible than pages of legalese. Unfortunately, a month and a half after its original posting on March 11, it has had only 371 views (one of those was mine – I’m not used to skewing a sample!). It also makes the obligatory plea to read the entire T&C document. Nevertheless, becoming more human and highlighting some of the key points is a step in the right direction, even if it’s not yet perfect. You can watch it for yourself here: What other concrete innovations are you seeing that bankers should be aware of?


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