Banking Fintech UX

The challengers’ challenge – fintech coming of age

The challengers' challenge – fintech coming of age. Photo by,
Written by Leda Glyptis

Challengers should look at the full life cycle of banking, not just the tip of the iceberg that retail customers interact with. Story by Leda Glyptis.

What do Starling’s outage, Monzo’s hiring drive and Revolut’s plummeting response turnaround times on its live chat have in common? On the surface, not very much. Just below the surface, however, we are watching three very cool companies come of age, and with them an entire industry having a bit of an awkward moment. Have no fear: this is good for all of us.

Big boy problems (where ‘big’ doesn’t refer to size, ‘boy’ doesn’t refer to gender and ‘problems’ don’t necessarily refer to woes)

What makes infrastructure ‘legacy’? Even if you have very little idea of specifics, chances are you’ve been to enough conferences to know it’s a bad word and banks have it, but where does legacy begin? How long before any infrastructure becomes legacy? How big does it need to be before it qualifies for the term? And does the term just cover tech? Can you truly move away from infrastructure legacy if you don’t transform your legacy business model?

This isn’t what panels are talking about, but behind closed doors, we’re all quickly coming to terms with two harsh truths:

You always bootstrap your tech on some level. There are always surprises along the way, miscalculations, runaway successes that buoy the P&L but strain the systems, product pivots or changes in the market, your clients or the art of the possible. Whatever you build, soon enough you will need something else, something more, something different. It helps if you start with less, it helps if you start with better fitness for purpose alignment. It helps, but it doesn’t magic anything away: your tech infrastructure is like housework – it helps if you get the basics right, it helps if you set yourself up for continued reinvention, it helps if you actually give devops serious headspace, and it helps if you’re disciplined about it. It helps if you do a little every day and a lot at regular intervals, because you’re never done, and that realisation hurts startups who have dined out on their lack of legacy for a few years, and now hey presto, they are acquiring some. Yet, it also hurts banks for whom getting going was bad enough, and never stopping sounds rather horrific.

Given how the world works at the moment, no man is an island and no bank is a fortress. Challenger or not, banks have deep interdependencies. It’s the way the world has worked for a while, streamlining service provision to suit the way business was getting done. As the latter is changing, the former needs to catch up, but hasn’t yet. For traditional banks, those dependencies are way too complicated to untangle on a whim, plus BAU is running with a multitude of complex demands of its own. For challengers, some hard choices needed to be made early on. To reimagine the entire stack and the whole value chain, you need endless time, money and a stomach of steel. Even if you have the appetite for it, money and time are never on the startup’s side, so you focus on what you do best, do it to the best of your abilities, and partner with some of the old world as a go-to market strategy.

A coming of age moment

So isn’t it legacy by another name? And doesn’t this become even more pronounced if your old-world partner has an outage and, despite your slick UX and user-centric functionality, you’re out of commission until the old world is back on its feet?

This is not an old school banker gloating – far from it.

This is not a case of the challengers stumbling. Rather, it’s a sobering moment for all involved when we realise that the hard work of making this happen is really under way. This is what it looks like when you’re part of the way through radical transformation. This is when you get ‘big boy’ problems: when you are really in business and the messy side of life asserts itself and demands to be tackled, urgently and imperfectly. It hurts when you get there, as a startup. I know that (I’ve been there), but it also helps if you recognise it for what it is: a glorious coming of age moment.

Joining the big leagues (where ‘big’ does refer to size, and ‘league’ does imply a degree of organised, competitive engagement of opponents who recognise each other as legitimate participants in the fray)

Digital challengers don’t all come in one shape and size, but they all have a few core traits in common: slick UX, thoughtful user journeys and impeccable customer care. It’s a joy to play with their app and it’s a moment of geeky pride to use their product – you become an evangelist after being driven by need to use their customer care, and finding it quick, helpful and effective. But there is a tipping point. I’m not being funny here, but if sustaining impeccable service at scale was easy and economical, the big banks would have done it. We are many things, but we are not stupid.

As a user, I have actually caught myself showing off my cool banking apps to people. (I know, I need to get out more, but bear with me.) While I was waiting for my Mondo card (early adopter credentials), I actually returned to the cute graphic of the anthropomorphic card running down the winding road, spanning my screen, to reach me. I have evangelised for Revolut in meetings and didn’t stop till my client downloaded the app. I have made having a Starling account a requirement for staying friends for all of my Dublin-based peeps. I am here. I am a believer. I am a convert. Yet, when I’m not playing and I’m going about the business of living; when I’m being a sleepy commuter, a hungry shopper, a late night flight booker, a careless tourist with no cash, I don’t care if my bank is a challenger or not, and I don’t care if it has the best UX or not. I care that it stays quietly and efficiently out of the way of my life being lived.

When things go wrong, the fact that it wasn’t technically your fault is as convincing to the client as the legacy argument. When you wait endlessly for a reply from customer support, you don’t care that tech early days of instant turnarounds were never meant to last. Even worse: the customer wants to live their life with your help, and now they have had a taste of what’s possible in banking service – they expect it.

The problem is that what customers experienced as the digital promise was really a case of good design meets small user group scenario, and nobody explained that to them – to us as users. So the bar has been raised and everyone will soon be found wanting, because legacy and because scale.

So let’s roll up our sleeves, challengers and establishment alike, and look at the legacy we have, the legacy we’re currently acquiring and the best way of getting out of our customers’ way, collectively and continuously with good end-to-end service, including the invisible depths of back-end processing. It’s time we looked at the full life cycle of banking, not the tip of the proverbial iceberg that retail customers interact with, but the full hairy beast of antiquated structures and associated infrastructures, analogue relationships turned into system interdependencies and value chain assumptions challenged by what’s now possible. It’s time we looked at that and got it out of the way, like the big boys that we are.

READ NEXT: It’s legacy banking systems that are the risk, not fintech

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About the author

Leda Glyptis

Leda Glyptis is a lapsed academic and long-term resident of the banking ecosystem, inhabiting both startups and banks over the years. She leads, writes on, lives and breathes transformation and digital disruption. She is a roaming banker and all-weather geek. All opinions her own. You can't have them.

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