How community and regional banks, and credit unions can match the user experience
The Apple Card is revolutionary on many fronts. “For the first time someone has taken a payment instrument and focused entirely on the user experience,” says Chris Harris, senior director of marketing, Ondot Systems. It should be a wake-up call to regional and community banks and credit unions.
How can smaller financial institutions counter the Apple Card and its impressive features? Their current approach is to keep adding more and more features to their apps, but this is not recreating the user experience. “Even if the Apple Card doesn’t gain a large amount of market share, they are setting new expectations for customers,” Harris says. The good news is there are now solutions for financial institutions who want to match these features.
The Apple Card is distinctive. The onboarding experience sets a new standard. The card offers transaction and spending clarity. It provides quick access to spending insights, even changing color depending on the type of purchase. Merchant names are clear, rather than the cryptic names that appear on statements, and consumers can see where they have made purchases on a map. And it creates a seamless experience between physical and digital card. Taken together, these features are transformative.
This is not to say the Apple Card is flawless, as can be seen in the recent allegations of credit bias against women. “This is why it’s important you work with partners that are experienced with banking and payments,” Harris says. There are indications of some degree of separation between Apple and Goldman Sachs as can be seen in the card’s promotional language: “Apple Card | Created by Apple, Not a Bank.”
There are also technical limitations. The transaction enrichments spelling out a merchant name and location might get it wrong if two merchants are located close together. And consumers don’t have the robust controls and alerts that a bank often provides.”
The threat to community and regional banks and credit unions
Despite this handful of limitations, the Apple Card does in fact set a new standard for payments. What should alarm smaller financial institutions even more, is it demonstrates that large tech players have their eyes on the industry.
“Tech giants are no longer sitting on the sidelines. The see this as opportunity and they are coming after commerce in the form of payments” Harris says. Huge players like Facebook, Google, and PayPal are interested. Giant megabanks are investing billions in this area. Whether they have the culture and innovative skill set to actually improve the user experience remains to be seen.
What can community banks and regional banks and credit unions do when they can’t invest these billions of dollars? How can they compete?
The Solution: Finding the right partner
Smaller financial institutions can compete with banking and tech giants by finding partners who can help them match the user experiences of the Apple Card The partner needs to be able to do more than just add features. “The successful partners are those with the skill set, resources, and know-how to create frictionless user experiences.” Harris says.
There are many partners to choose from. Harris says, “if you are seeking to create an improved user experience around payments, we believe Ondot Systems is the right partner.”
This is because of Ondot’s own experience and capabilities. It has hundreds of engineers and an eight-year track record in the industry. It has worked with thousands of banks, and has relationships with most payment processors. “We have done hundreds of integrations, we are quite familiar with compliance and regulatory concerns in the space as well as ongoing mandates,” Harris says.
With Ondot, users can open an account and start using it within minutes. They can clearly see their spending patterns and merchant names. “The overall experience of using the card is designed around how people interact with payments,” Harris says.
Tech companies, despite their size, face challenges entering financial services, as some of Apple’s problems have shown: they don’t have the “fin” experience. Ondot, in contrast, is a true fintech company, meaning it has both a background in technology but also experience working with banks and credit unions.
Today everybody already has a mobile banking app but consumers are demanding more. The entrance of Apple has shown the way forward and created fintech 2.0. “Unless you can create similar user experiences, you will be a dinosaur.” Harris says.
Partnerships can allow you to get there. And only Ondot Systems is focused on the user experience around payments.
