The Future of Banking: Olivier Berthier

“I think one humble recommendation I would make is, okay, getting everyone to learn how to code is great, but getting everyone in a bank product team to learn how to create the positive intervention, how to address those accessibility, desirability, feasibility objectives, how to nudge properly, teaching people basic behavioral science techniques and what those conversations are, to me is becoming as important as teaching people how to code.”

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Intro

This episode of The Decision Corner features Olivier Berthier: data scientist, software designer, and CEO of Moneythor. Moneythor is a digital infrastructure company that specializes in banking solutions that use machine learning, big data analytics, and behavioral science to orient financial systems towards customer-centric ends. Some topics we discuss include:

  • Olivier’s financial software company Moneythor: what it is and what it does
  • The constantly evolving relationship between banks and their customers
  • The impact of digital spaces on financial relationships
  • The transition from a product to customer focus at major banking institutions
  • The potential benefits of the big changes coming to banking through software analysis and behavioral science
  • The unique potential of emerging data ecosystems
  • How to ethically manage customer data
  • How to popularize behavioral science and the tools to implement it digitally

Key Quotes

What is Moneythor?

“Moneythor is an enterprise software firm, and our mission is to help financial institutions, which is primarily retail banks, improve the digital banking services they offer to their customers, by making them more personalized and engaging. To do this we’ve designed and built a data processing engine using all the good buzzwords, so data analytics, machine learning, and behavioral science techniques to deliver value and content to those customers. So it includes contextual insights, actionable recommendations, generally focused on improving the financial wellness of the bank’s customers.”

Consumer Expectations

“There seems to be natural and maybe unconscious expectations that the firms we are entrusting with our money will take good care of it, and therefore good care of us too. Because money is such a key component and enabler in our lives, we are seeking tailored services aligned to our individual situations, with content to help us become better with our personal finances.”

A Recent Shift in the Banking Mindset

“From the way they are organized internally, to the way they interact with their customers, with most of those interactions being actually called campaigns, and designed to push a particular product. It is clearly a significant change to move to true customer-centricity for most of those organizations. By and large today, we’ve seen banks improve significantly on this front over the past few years, with more internal organizations aligned to customer journeys, a moralistic approach to servicing customers, and actually investing more in delivering financial well-being messages.”

A Potential Solution to Banking’s Data Diversification Problem

“We are in the middle of big regulatory changes in our space, called open banking. Hasn’t really reached North America yet, or let’s say it’s a very industry-led approach to open banking in North America. But certainly in other parts of the world we also operate, such as Europe with the new Payment Service Directive Number Two, acronym PSD2, which for about a year, a year and a half now is mandating banks to expose services to the community that will not allow them anymore to keep data about their customers for themselves. So in other words, for given customers, as long as they give their consent to one particular institution to get their data from the other banks, that other bank cannot refuse.”

What a Modern Bank is really Selling

“They’re selling journeys to help you achieve your savings goal, and we’ve seen this approach, stopping talking about a financial product but instead taking the perspective of the client and building a service around assisting them to achieve their savings goal, is one of the areas which we’ve seen directly behavioral science technique reshape the way a customer conversation was created.”

Transcript

Brooke Struck: Hello everyone, and welcome to the podcast of the Decision Lab, a socially conscious supplied research firm that uses behavioral science to improve outcomes for all of society. My name is Brooke Struck, Research Director at TDL, and I’ll be your host for the discussion. My guest today is Olivier Berthier, CEO of Moneythor. In today’s episode, we’ll be talking about data analytics and the value of taking a human behavioral approach to the numbers. Olivier, thanks for joining us.

Olivier Berthier: Thank you Brooke, it’s great to be here.

Brooke Struck: You run a firm called Moneythor. Please tell us a bit about your history and where you are today.

Olivier Berthier: Moneythor is an enterprise software firm, and our mission is to help financial institutions, which is primarily retail banks, improve the digital banking services they offer to their customers, by making them more personalized and engaging. To do this we’ve designed and built a data processing engine using all the good buzzwords, so data analytics, machine learning, and behavioral science techniques to deliver value and content to those customers. So it includes contextual insights, actionable recommendations, generally focused on improving the financial wellness of the bank’s customers. In terms of our history, we started in 2013, at a time when most banks had started to offer relatively decent digital services to their customers, which are internet banking and mobile banking, although primarily focusing on transactional capabilities.

Olivier Berthier: So you could look at your account balance, your credit card transaction history, you could pay your bills, do a fund transfer, and maybe even with some having basic budgeting tools but very light in terms of proactive personalization, and at the end of the day not driving much energy for engagement for the banks. That was the context when we started and around that time we looked at the dynamics from the perspective of both customers and banks, and we noticed two things. On one hand, customers such as you and me were a bit frustrated by that solely transactional relationship which we had with our banks, and a bit frustrated with receiving very little assistance from our banks to improve our personal finances, both in the short and the long-term, I think despite ever-increasing digital expectations. It was certainly our team’s own experience with respect to banks.

Olivier Berthier: That’s from the customer side, but from the bank side they were starting to wake up to the benefits of having digitally active customers. Early studies were starting to point to digitally active customers being more profitable, using more financial products, being cheaper to serve and exhibiting faster growth in income for the bank. So in summary the banks were starting to realize the value of digital engagement. On the back of this we decided to build our solutions around these pain points. There was a lot of convincing to do initially, as banks remained focused on their traditional metrics, so reducing costs and deriving more revenue from their customers. But gradually the benefits of digital engagement started to be well understood in most organizations.

Olivier Berthier: Again, back to our history, fast track to 2020, we don’t really need to evangelize any more. We have today over 15 implementations globally using the Moneythor solution inside the digital services, it’s with banks of various sizes from very large international to regional, as well as fintech firms, and all of them using us to try and create more engaging experiences for their customers. So that’s us in a nutshell.

Brooke Struck: Thanks. I really want to pull open one of the points that you raised there. You noted that digitally engaged customers tend to be more profitable for banks, so banks are very interested in expanding this market segment. You also noted that such customers were frustrated by what was at first at least primarily driven as a transactional relationship, being able to check your bank balance, and undertake certain very mechanical operations, doing self-service online. You noted that there was frustration that that transactional approach was kind of the predominant model of digital engagement. What is it that these clients were looking for, what kind of value or what type of experience is a potential client of that nature seeking? What is an attractive value proposition for them?

Olivier Berthier: There seems to be natural and maybe unconscious expectations that the firms we are entrusting with our money will take good care of it, and therefore good care of us too. Because money is such a key component and enabler in our lives, we are seeking tailored services aligned to our individual situations, with content to help us become better with our personal finances. This includes avoiding running out of money, as simple as this, but also assisting us in achieving our goals. I mean, our goals generally have a financial component embedded into them, be it to buy the new iPhone, a car, a first home, financing the education of our children, or preparing for retirement. So, seeking for more content and more assistance to manage your finances. But consumers of financial services, like I think in most sectors, also always have expectations around this.

Olivier Berthier: It’s all I think because nowadays we can pay for things anytime, anywhere, and because there is a daily ongoing feed of activities on our bank accounts and on our payment cards, as a result of demand on our financial institutions to provide these assistance in a timely manner, at the right time. It’s the second element, is assistance but assistance on an ongoing basis, and at the right time. The additional one is also assistance with the right voice, we expect financial institutions to understand our situation. If we’re running out of money, the messaging and the content delivered to us should be different from more wealthy periods where we’re able to actually think about doing something with the surplus of cash that we have. So timeliness and the right tone of voice and the right content are two things which we as customers, as consumers are seeking.

Olivier Berthier: I mean, financial matters can be fairly dry, and most people, apart from money management hobbyists, as we call them sometimes, don’t want to budget, they don’t want to think about their money too much and too often. So it is also important for those bite-size money management insights to be somehow entertaining, so we are seeing some gamification techniques come into play as well, in what customers expect around this content.

Brooke Struck: So we see here a shift in perspective from a very transactional approach, to something that’s more of a kind of a meaningful conversation between the clients and their financial institution. You noted that content is very important, so having the right content delivered at the right time, but also delivered with the right voice. One of the elements that you noted there, just in the last couple of things that you said, was that a lot of these clients are not actually that interested in spending so much time thinking about their money. And so that meaningful conversation needs to be about the things in their life that they care about that are supported by money, that have a very clear financial dimension. But primarily, the topic that they’re interested in talking about is not money, if I understand correctly.

Olivier Berthier: I called money an enabler, that’s the primary way most consumers are looking at their finances. Something which either limits my ability to do things, or enables me to do more. Again, both in the short-term and in the long-term. Apart from money management hobbyists, the standard customer of the financial institutions is keen to receive personalized insights to improve their finances, but is not necessarily interested in ongoing financial discussions around their finances. I think another important point that I made is the bite-sized element, it has to be timely, the turn of voice has to be right, but the content has to be bite-sized and ideally entertaining.

Olivier Berthier: I mean, we’re not necessarily talking about embedding games inside my transaction notifications. But sometimes, some of those messages can be a little bit less serious, or just painting a bit of color around where my money goes, without necessarily being rocket science insights and predictions about what will happen to me in the next two years, but just basically getting me to be familiar with my financial flows, slowly but surely being a bit more interested in this, paying a bit more attention to it. But all this is delivered through bite-sized, actionable pieces of content, something that we see being expected, and a lot easier to consume by most consumers.

Brooke Struck: I think there’s definitely a tradition of money conversations being treated as very heavy, weighty, meaningful conversations, like you never have a casual conversation about money. That seems to be a bit of the antithesis of what some of these clients are looking for, that they want something that is a bit more light, that they can think about their life, and I really like the approach that you’re taking here, of money as kind of an enabler here, rather than the topic of conversation itself. Every time we mention money, it’s this heavy, very… Something that weighs down on my shoulders, it’s not likely to be a conversation that I will find very enjoyable or pleasing as a client.

Olivier Berthier: Yes, and the transition is not necessarily easy for the traditional way financial institutions at the branch have interacted with their customers. I mean, even in the situations where historically a bank was really caring about their customers and providing them with financial assistance, it was more financial planning. So once, or maximum twice a year, you have an appointment with your banker, with your financial planner, and you review your entire situation, and you have a document with a lot of charts and projections and pages and pages of information. The first reaction to creating these always-on assistants was to port the old financial planners’ interactions to the digital world, and to those continuous and going daily conversations, and obviously it doesn’t work.

Olivier Berthier: I mean, there’s a huge kind of content which is forcing us to ask ourselves questions, looking forward into the future, that don’t work well in this context. That’s the kind of situation we started a lot of those conversations from in around 2013, 2014 when we started out to assist our customers, it was primarily viewed as that annual meeting with customers to look at their entire situations, and their financial journey the past 20 years, and the next 20.

Brooke Struck: It seems like there’s a portfolio of skills that’s needed in order to deliver this kind of service well. Data analytics capabilities have been quite developed, including within the banking sector but also beyond, for quite a number of years. I think that they’ve been put to very good use in delivering the right content at the right time, using AI algorithms for instance to understand the client’s situation, and what types of decisions they might have coming up in the short term, and then providing them this sort of just-in-time content delivery of, “We expect that you’re going to have to do X, Y or Z in the near future. Here’s a short article that you might find helpful as you’re going through these reflections.” So the data analytics side is probably already quite developed, but what about getting the right voice?

Brooke Struck: I wouldn’t exactly look to some of my friends who are my more admired data science colleagues and say, “These are people who really write very compellingly and approachably for a mass market audience.” What is the skill that we need to bring into the mix to really make progress on the right voice, and to achieve those kinds of meaningful conversations with clients who are seeking that type of value?

Olivier Berthier: We have to remember also we’re in the banking space, and banks have historically been very product-centric organizations. From the way they are organized internally, to the way they interact with their customers, with most of those interactions being actually called campaigns, and designed to push a particular product. It is clearly a significant change to move to true customer-centricity for most of those organizations. By and large today, we’ve seen banks improve significantly on this front over the past few years, with more internal organizations aligned to customer journeys, a moralistic approach to servicing customers, and actually investing more in delivering financial well-being messages. In terms of the skills gap, I think even before we get into the data analytics, the machine that has to turn into something easy to digest at the right time for customers, we have to understand the organization that this has to be rolled up in.

Olivier Berthier: The first skills gap is to move from product-centric to being truly customer-centric, and that was not an easy one. I think, again, by and large the banks, certainly the ones we work with today, the senior leadership teams are convinced, and have switched to the customer-centric mindset.

Brooke Struck: Can you share some stories from the trenches, if you will, in terms of what those conversations were like in the early going? You walk in to speak with senior executives of a very conservative institution, like a bank, and you go in and say, “You need to focus more on your customers’ needs, and stop seeing the world through this prism of driving products.” How do these senior executives respond to a message like that?

Olivier Berthier: You know, we start with this, and even in the early days it was actually resonating. I mean, it’s a positive message, right? It’s a nice message, and then of course because we’re software engineering people and we’re techies, we describe how we go about it, and then we describe that we’re analyzing at real time and at scale, customer information, and that we can detect real time the customer’s eligibility to receive a particular piece of message. So we use all those interesting use cases around identifying when the customer has a risk of overdraft, and alerting them very early on, or that they should think about setting up an emergency fund, a rainy day saver account. So we use those techniques in order to trigger this. But then the senior executive in front of us is starting to realize what that technology can do.

Olivier Berthier: And they understand that this technology actually can be used also to do very precised targeting for some of their marketing messages. So their original reaction was to say, “Oh, yeah, yeah, your message is great, I like the vision, but your technology is actually brilliant to allow us to be even better at being always on, and hyper-targeted towards our customers, and being able to present a dreaded next-best offer to them at the right time. So those initial conversations were hijacked by marketing, and even if the high-level message was well-understood, and I think the senior exec was convinced, there was this magnet of using data and data analytics in order to do precision targeting for their products instead of using it for better improvement around the customers’ finances and all that good stuff.

Olivier Berthier: The senior leadership team we’re meeting, they’re sold now on this. I think most of them have realized that a digitally active customer is more profitable for the bank, and actually a customer who has become a better spender and a better saver is also more profitable for the bank. But the message has not necessarily reached the middle management yet. There are still some teams when we come to rolling out and implementing, despite the C-Suite understanding of these being the right thing to do, there are still some key performance indicators, some incentives for some of those staff, which are still aligned to presenting the right product to the right customers at the right time. So hijacking a technology like ours, and to focus a little bit too much on marketing, that’s a risk that we were encountering in our early days. Not so much anymore.

Brooke Struck: Getting back to delivering the right voice, you talk about the risk that a marketing team kind of hijacks this technology and this approach, basically repurposing it towards the kinds of activities that they have traditionally done. That’s understandable of course, there’s sort of an institutional inertia to the way that different components of the organization as a whole should be expected to behave, that those changes and behavior across the organization will take more time. How can we bring behavioral science into helping to craft a different kind of message, one that resonates more strongly with the client on tone specifically?

Olivier Berthier: It’s actually the journey that my team and myself actually, we’ve somehow gone through… I mean, my background, and it’s the same for my core team, we’re software engineers with applied mathematics backgrounds, we love our algorithms, we love our models. We love how clever some pieces of software can be, and the quality of the result and how intelligent that output will be. But we had to learn along the way that this is not necessarily what matters to drive digital engagement, customer satisfaction and positive results in terms of making people better spenders and better savers. One of the things that we’ve learned along the way is not to fall in love with our machine learning models and our software first, but really take a step back and look at what we’re trying to deliver. We’ve discovered that it’s actually very easy to deliver very creepy messages.

Olivier Berthier: Even if the data is telling us a story, this doesn’t mean that the output should be as raw as what our algorithm has produced. It’s an interesting journey when your whole education and your whole professional life has been around crafting the most efficient, performance-wise, but also in the quality of the output, piece of software that you can. So we certainly had to learn quite a lot, and actually for most of us, before we started to add behavioral science skills into the team, we had to look at our software and what we were producing differently. So if you think about the traditional ways software will be delivered, there’s a design, it’s developed, it’s tested, it’s delivered. The test is very much, does it work according to the specifications? We’ve actually learned to add extra layers of testing in our output, and actually add a number of check boxes and checklists which our software had to comply with.

Olivier Berthier: To give you an example, there are three dimensions, three pillars that we’re trying to make our software go through whenever we’re creating a new recommendation, a new insight, or a new nudge, is to make sure that this is going to be accessible, it’s providing transparency, it’s easy to understand that output. It’s not a black box, so even if the machine learning model behind the scenes was potentially working on neural networks that have come up with some results that are potentially hard to explain, we are forcing ourselves to make it accessible by finding a way to explain to the end user, so the banks’ customer in our case, how these messages were generated. The second dimension is the desirability, I mean, is the output desirable for the customer? Is it really going to make their life better, is it going to really improve their finances?

Olivier Berthier: That’s another filter that we’re forcing ourselves to go through. The final one is, is this actionable? Are we able to embed in the output of our models, of our data analytics, of our software, are we able to embed calls to actions that will make it easy for the customer to take an action, and is this feasible, is this actionable? Can they really and simply act upon this piece of advice that we have generated? This kind of checklist is something that we were forced to add in our pipeline, in our normal enterprise software development life cycle, and we certainly had quite a lot to learn around this along the way.

Brooke Struck: It sounds like you also need a mix of skills and perspectives in order to be able to effectively assess against this checklist. So for instance, someone who’s a very, very comfortable programmer, a coder for instance, might find that a certain call to action is definitely actionable, that there might be some technical steps along the way, but for them this represents no barrier. Whereas for the mainstream user, there might be significant barriers along the way. How is it that you make sure that you have the right complement of skills and perspectives to ensure that those checklists can be meaningfully verified?

Olivier Berthier: There are existing built-in practices, software development life cycle, that are helping. So peer review, for example, is something which has existed for many years, in developing software. This is actually forcing you to have another pair of eyes to look at the output of what you’ve generated. We’re lucky enough in our team to have very diverse cultures and nationalities, so we have a natural way to look at this output from our own consumers’ eyes, in a very different way. So, this is definitely helping. Again, I’m a true believer that embedding this inside the skillset expected from software engineers is the right way to go, and if you start to embed these that deep, then your whole framework, your technical and application architecture is going to also benefit from this.

Olivier Berthier: So leveraging existing software development life cycle techniques, and adapting them slightly, like that concept of peer reviewing, to make sure that there are more pairs of eyes and more personas that will test themselves against the output of the model, of the machine, that has helped us out. And then, adding other people perspectives with other backgrounds into our internal testing cycles. So as I said, we made the testing phase much thicker than it was originally, and adding people from different skillsets, which we tend to call business analysts, customer experience profiles in our world, have helped us make those validations, validate against those checklists, that what our software was delivering was actually making sense. The additional thing is that fundamentally we’re providing our banking clients with a framework, so they can actually build their own nudges, their own triggers on top of our solution.

Olivier Berthier: So the need to be more educated and create changes in the product life cycle is also something that our clients themselves have to embed in their organization, so it’s not just us, it’s not just the software itself, even if we had to go through this journey, our clients themselves also have to embed this into their organizations.

Brooke Struck: Do you have any examples of where behavioral science specifically has made meaningful contributions in these kinds of processes, of developing a nudge and assessing it against certain criteria or checklist?

Olivier Berthier: Yeah, and again, I’m probably going to start from a product-centric approach. You know, I mean, banks for ages have sold savings accounts, or savings products, or fixed deposits, so you park some money, you have an interest rate, and two years down the road you will have a bit more money. But this was historically sold as a savings account, as a financial instrument. At the end of the day, it’s supposed to be this bucket that you will have outside of your day-to-day current account, checking account, and the money you put in that savings account is going to be insulated from your daily activities. So it’s a little bit more protected, and at the end of the day that’s the money that you will have access to when you want to buy your first home, or achieve any of your goals. So that originally was just a product that was sold, there was no story around this, there was no real assistance.

Olivier Berthier: For most of the organizations we work with, they’re actually not really looking at the savings account as the financial product anymore, to the point that they’re not even selling savings accounts anymore. They’re selling journeys to help you achieve your savings goal, and we’ve seen this approach, stopping talking about a financial product but instead taking the perspective of the client and building a service around assisting them to achieve their savings goal, is one of the areas which we’ve seen directly behavioral science technique reshape the way a customer conversation was created. So, the whole journey will start by asking you potentially what you want to save for, what are your objectives? Different people will have different objectives, like I said earlier, short-term, middle-term, long-term, consumer-oriented goals or strategic goals, life goals, etc. , there could be some very different objectives.

Olivier Berthier: So, asking these questions to the customer. There are also goals which are not necessarily things that you want to achieve, but things that you should achieve. I think I mentioned briefly the rainy day saver account, like the fact that in case you lose your job, or you go through some hardship, it’s good to have three to six months of income ready for you, to cover those kinds of situations. This doesn’t really need to start with a question to the customer about what they want to achieve, which could be a daunting question as well for customers, but instead it could be an automated assessment, and an invitation to go through these very attractive, bite-sized evaluations of where they stand today. Of course, triggered only when behind the scenes we’ve detected that this customer does not necessarily today have three months or six months of savings to cover for a particular situation.

Olivier Berthier: So we start with an assessment, and then we ask a few questions, and then we propose a few easy things to achieve, to start the journey towards saving this particular amount. And then on an ongoing basis, there will be congratulations, rewards, alerts if you are contributing regularly to your emergency fund or to your savings goals, if you are on a streak of contribution without withdrawing any money. So there are all those, sometimes negative alerts and notifications if you’re not on track, but also positive ones that are generated along the way. So this journey starting from selling a savings account, and that’s it, with nothing around, to creating ongoing tips and little actions so that slowly but surely customers will have some money in their savings account, is one of those very important examples where behavioral science has contributed to the conversation.

Brooke Struck: And I’m sure that, well, this seems to fit much better with the narrative you were articulating earlier, that primarily clients are looking for these kinds of meaningful conversations, not for this transactional approach. How does this affect not just the profitability of a client once they’re there, but also customer acquisition. Are there some success stories to share about how this kind of more user-centric behaviorally-driven approach has made it easier to acquire clients, especially around savings let’s say, which we know is an area that’s rife with challenge?

Olivier Berthier: Probably not so much from an acquisition point of view. I think the primary benefit we’re seeing of those techniques is in retention, is in customer satisfaction and profitability of existing customers. Does it help to acquire customers? We haven’t really seen evidence of customers switching because one bank is promising to entertain them, or offer them journeys to achieve their financial well-being. It has not come yet, in our experience, to the acquisition stage, or to the “switching from one institution to another” stage. Still today it’s very much embedded into the retention, into what we call the post-login. So the customer is already with a bank, they are logging on generally because they have a job to do, and this is generally checking my balance and looking at my recent transactions.

Olivier Berthier: So it’s about embedding this value inside those jobs and making it very contextual, next to the display of my account balance, or alerting me about something I should pay attention to, in the context of my last five transactions for example. So it’s more, at this level, really than using this to acquire customers, it’s not really something that we’ve seen being rolled out mainstream. Even banks using this as a branding element, say “we are the bank who cares and we’ll help you”, that’s probably a message that all of them are developing at a high level. But acquisition is really something which is not really addressed yet, I would say.

Brooke Struck: This raises an interesting kind of question or tension, I’ll paint the picture of some mythological past where a given client probably only had dealings with one bank. They had all of their checking products, saving products, all of these things were with a single institution. In that kind of context, it becomes easier for the bank to analyze the entire financial situation of a given client. In the last couple of decades there’s been I think a lot of diversification, lots of people are with different banks for different kinds of services. Does that create a tension, then, when we pivot from a product and service focus to an experience focus, where all of a sudden there isn’t a clean overlay anymore between the kinds of services that you are getting from a bank, and the kind of experience that they are offering to you?

Brooke Struck: For instance, if one of the banks that I’m with is offering me this kind of saving experience towards, let’s say buying a house, how does that interface with the fact that some of the components of my journey towards buying a house might touch on savings, or checking, or the way that I use credit, the way that I’m investing, which can be spread across multiple institutions? Does this pivot create tensions with a new overlay?

Olivier Berthier: It does, definitely. I mean, the less data you have about your customer, the more you’re going to struggle to find a timely message resonating with their pain points, and with their expectations. But, there is an answer to this. We are in the middle of big regulatory changes in our space, called Open Banking. It hasn’t really reached North America yet, or let’s say it’s a very industry-led approach to Open Banking in North America. But certainly in other parts of the world where we also operate, such as Europe with the new Payment Service Directive Number Two, acronym PSD2, which for about a year, a year and a half now is mandating banks to expose services to the community that will not allow them anymore to keep data about their customers for themselves. So in other words, for given customers, as long as they give their consent to one particular institution to get their data from the other banks, that other bank cannot refuse.

Olivier Berthier: The open banking regulations, so now it’s live in Europe, it’s now live in Australia as well, and more and more we see jurisdictions in countries and central banks and regulators introducing similar open banking directives to their local or regional banks. This is kind of solving the data problem that you were pointing out. Now even my non-primary bank, so the financial institutions which only have a credit card with me, as long as I trust them and I give them my consent to pull my data from my other financial institutions, they will suddenly have access to data that goes way beyond the credit card, and we’ll be able to create that more holistic tailored service that is required to create those meaningful interventions, and those meaningful assistance to improve my finances.

Olivier Berthier: So you are absolutely right, it’s an issue if you only see a small subset of your customers’ financial activity. But it’s an issue which is in the process of being addressed and even solved in some jurisdictions through that multi-bank aggregation technique, through those open banking regulations. The objective of the regulator, of the central banks behind open banking, is very much actually customer or consumer-centric, it’s to improve competition in the banking sector, but also to allow portability, to allow customers to not necessarily have their data and their information being locked in a particular institution. It’s very much a customer-centric regulation, which as a side effect is enabling banks to compete on the quality of their advice, because suddenly all of them, with the customer’s consent obviously, have access to the same data and can leverage the same data points to deliver this valuable content.

Brooke Struck: It seems also ideologically a natural outgrowth of something like the GDPR for instance, where we conceive of the citizen as the owner of their own data, that even though the bank is the one that is holding information about me, the fact that the information is about me means that it belongs to me, despite the fact that I am not necessarily the one physically holding it.

Olivier Berthier: In Europe GDPR and PSD2 have followed two different paths, but of course there are a lot of connections between the two. Some other jurisdictions, like I was mentioning Australia previously, have introduced consumer data rights, the top-level regulation is Consumer Data Rights, so CDR, so exactly what you’re describing about my relationship with my data. Actually the open banking regulation in Australia is under CDR, so it’s very much driven first and foremost by the consumer data regulation, which then includes the financial sector. We’re seeing other jurisdictions starting to really look at this as a data-driven regulation first for the benefit of the consumers.

Brooke Struck: So given that these kinds of data ecosystems are being established, as we discussed in more detail here specifically about the banking sector, but seeing GDPR and other broader kind of data-driven initiatives, what we’re seeing is an ecosystem where consumers have more and more control over their data, and therefore can grant access to that data to service providers and product developers and this kind of thing. As you mentioned much earlier on in our conversation, the data science and data analytics capabilities for this are already probably in place in a lot of the organizations. For any senior executives or other senior members of an organization who are listening to this or reading the transcript of our discussion, where do you see the opportunity in that evolving data landscape to not just say this is a data opportunity, but to say this is a behavioral opportunity? What are the first steps that they can take?

Olivier Berthier: I think the first one is to align the incentives. If their teams are primarily measured on how much product they’re going to sell, this is going to be difficult for them to move to that stage. So aligning the incentives and introducing more digital engagement-based incentives. Objectives set to improving the time and the quality of the interactions that customers will have with the banks’ digital channels is a starting point. The next one is education, I mean, simply people need to be educated about those techniques and their benefits, and even if as I said earlier the senior leadership teams tend to be fully convinced and fully onboard now, there is still a need to educate the broader organization to this. Interestingly, there was until… I mean, it’s still ongoing, but kind of started a couple of years ago, where suddenly everyone had to learn how to code.

Olivier Berthier: So everyone had to learn how to do Python and JavaScript, and learning how to code, not just for kids but for anyone, suddenly became the thing to do. We’ve seen that in banks as well, I mean, everyone had to become somehow a software developer. Why? Because every company in the world is interested in becoming a tech company, so all the staff have to become potentially a coder. So I think one humble recommendation I would make is, okay, getting everyone to learn how to code is great, but getting everyone in a bank product team to learn how to create the positive intervention, how to address those accessibility, desirability, feasibility objectives, how to nudge properly, so in other words teaching people basic behavioral science techniques and what those conversations are, to me is becoming as important as teaching people how to code.

Olivier Berthier: And this message comes from a techie, it comes from a software engineer, so I think education would go a long way. We’re certainly starting to see some of the largest banks rolling out this kind of behavioral science educational material inside their core product team. So incentives and education, I would say.

Brooke Struck: Thank you very much, I think that’s a very insightful note to end off on, and a very concrete one as well. So, Olivier, merci beaucoup for having taken the time to speak with us today, I really appreciated the insights that you had to share.

Olivier Berthier: It was my pleasure Brooke, thanks very much.

Brooke Struck: If you’d like to learn more about applied behavioral insights, you can find plenty of materials on our website, thedecisionlab.com. There, you’ll also be able to find our newsletter, which features the latest and greatest developments in the field, including these podcasts, as well as great public content about biases, interventions and our project work.

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