A supermarket loyalty scheme mailing this morning set me thinking about the question of friction in open banking.
The mailing itself was unremarkable – a set of money-off coupons. The fact that the supermarket had chosen post rather than email was also unsurprising. I’m sure they have plenty of data comparing the cost-effectiveness of the two alternatives.
More thought-provoking was the supermarket’s decision to send physical coupons. Clearly, they could have ‘loaded’ the coupons onto my loyalty card, so that they would be automatically applied. But with physical coupons, I’m compelled to carry the coupons with me if I want to take advantage of the offers – and every time I open my wallet, there’s a visible reminder of what’s on offer.
It works for them, but it’s inconvenient for me.
And so to open banking.
Open banking commentators often talk about removing friction, creating seamless experiences and so on. But it’s not quite so straightforward.
Some time ago, Ipsos highlighted the importance of friction in open banking adoption. A little bit of friction encourages people to think about their choices, rather than just handing over data regardless. But the level of friction needs to be carefully calibrated to avoid deterring adoption of useful solutions.
More recently, PSD2’s requirement for multi-factor authentication conspicuously adds friction into the customer journey to help reduce fraud. As Barclaycard’s Elizabeth Hartley has highlighted, that’s sending consumers rather mixed messages on open banking.
And to me, today’s supermarket mailing again highlights the importance of friction – not just when signing up for new services or authorising payments, but as an integral part of the customer experience. Creating a truly frictionless, seamless experience means giving up every opportunity to influence the customer – and that’s too high a price to pay.
P.S. Browsing for thoughts about friction, I came across this extract from the book Speaking of Science. This may not have much relevance to the management of CX design in your organisation, but I enjoyed it.
Two managers decided they would go moose hunting. They shot a moose, and as they were about to drag the animal by the hind legs, a biologist and an engineer came along.
The biologist said, “You know, the hair follicles on a moose have a grain to them that causes the hair to lie toward the back.”
The engineer said, “So dragging the moose that way increases your coefficient of friction by a tremendous amount. Pull from the other end, and you will find the work required to be quite minimal.”
The managers thanked the two and started dragging the moose by the antlers.
After about an hour, one manager said, “I can’t believe how easy it is to move this moose this way. I sure am glad we ran across those two.”
“Yeah,” said the other. “But we’re getting further and further away from our truck.”
Want to know and discover more about Open Banking? Visit www.openbankingworldcongress.com to book or provisionally reserve your spot today by registering your interest.