Marketing Week (MW): What is your overall approach to your role?
Josh Bottomley (JB): The focus at the moment is on the retail bank and wealth management. What really matters is that we keep testing, we innovate and we try to stay one step in front of consumer behaviour. You don’t want to be three steps ahead, because customers aren’t going to use you and you may end up spending money you don’t need to spend. You don’t want to be one step behind, because then you will always be playing catch-up. You ought to have your forward- thinking customers feeling very pleased, and I’m OK if some of our more traditional customers are always feeling slightly in need of catching up.
MW: Do you believe the bank’s customers are willing to be pushed forward in this way?
JB: They just want the basic stuff to work really well, and intuitively and simply – for example, the ability to log in easily to mobile banking. As we get that fixed, that gives us the opportunity to start offering new types of services. That’s when it gets really interesting. What are the things that we can do that they didn’t expect?
MW: Do you foresee a world where banks don’t need branches?
JB: You can call me a heretic: I personally am not all that bothered about what happens in branches. My job is to make the digital channel work incredibly well for our customers and in a multichannel context – so that includes working with branches and call centres.
MW: If a customer prefers never to have to go into a branch, is it your job to enable that?
JB: I absolutely think that if you never want to go into a branch, you shouldn’t have to. To take an example, in the US we have launched remote cheque deposits, so you can take a photo of your cheque. In Brazil, using a mobile app we can take a scan of a barcode on a utility bill and pay it straight away. In Hong Kong, we’ve got people on the same app who are doing stock trading.
MW: How helpful or problematic is it having to tailor HSBC’s digital services for different banking markets around the world?
JB: The ultimate challenge is how I get us to a point where people stop saying it’s complicated to work internationally. That doesn’t always mean being more sophisticated; sometimes it is the simplifications that will be the benefit. The related point is how we can show you through the digital experience that, if you’re banking with HSBC in Hong Kong, you’re benefiting from the fact that other people are banking with HSBC in Brazil.
MW: Why is wealth management such a big digital priority for HSBC?
JB: We have some interesting research that shows there’s a growing number of what we call the global affluent, who live in cities such as London, where 34 per cent of people either weren’t born in the UK or [have parents who] weren’t. There are a lot of people who have had some form of education in another country, or have a property interest or are sending money to someone in another country. That’s an extraordinary opportunity for HSBC to be in a unique position to solve some big headaches in their lives.
MW: Can you give examples of how HSBC is trying to fix day-to-day banking problems?
JB: We’re doing a lot of work with money analysis tools to help people make practical decisions.
An example is at the point of sale. If someone is trying to buy something and we happen to know that through one of their reward schemes they can get a discount, how can we make that available to them there and then, almost as an automated feature, rather than them having to be aware in advance? Wealth is also a very interesting area, where using a smartphone can help people make sometimes fairly simple decisions and get advice – people could video-link into an expert on that topic. We’ve just started scratching the surface of what’s possible.
MW: How does your previous experience in the technology sector, at Google, influence digital development at HSBC?
JB: One of the things we all know about Google is that it operates on a global basis, and it is able to do that in a way that keeps innovating faster. It’s very hard locally to compete with Google, because it is benefiting globally from the tests and experiments that are happening in different markets. What I’m trying to do at HSBC is very similar to that.
We’ve already got our mobile app, which was first launched in May, operating in 26 countries. We have set it up to [meet different countries’ financial regulations] and for different competitive contexts. I’m not sure any other bank has managed to get that far that fast.
MW: How have you had to change corporate attitudes towards product development in order to move so quickly?
JB: I’m trying to move away from the world where customer insight drives the requirements, which then drives the technology team to try and build something and it’s six months or nine months before you learn from it and test it. Maybe I’m biased from my Silicon Valley experience but I think right up front you can show what the technology is capable of doing, then bring together the customer insight, what your brand stands for, regulatory constraints and an understanding of the economics.
It’s much harder, but the bull’s eye is when all those areas are in alignment.
MW: Is the culture of a bank, which is so conscious of risk, a good place to use this ‘agile’ development philosophy, where new products and services need to be tested and allowed to fail?
JB: One of the reasons I took the job is that, since the financial crisis, the issues that banks are trying to deal with [create] the most interesting opportunity for what we’re trying to do with digital. One of the aspects of it is that it is completely transparent – the process is there and you must have an audit trail. We can go back to regulators and say we’ve done some experiments, now this is the consequence. One of the in-vogue topics across the industry is behavioural economics. We have a platform that allows that to be tested and the consequences seen with complete transparency. It couldn’t actually be a better environment.
MW: Will transparency, and improving the customer experience through digital services, help restore trust in banks?
JB: If I have savings, I will trust a bank to look after them rather than putting them under my mattress. I think that has been a fairly sustained and significant asset that we are paranoid not to compromise. The trust that was lost through the various scandals relates to banks’ automatic right to be a one-stop shop. We need to regain that, and transparency starts to allow us to do that. That’s the trust that we will gain from getting the proposition right. It’s starting to come back and it will accelerate.
MW: Do you think new rules requiring banks to complete a current account switch within seven days, once a customer asks to change provider, have encouraged greater transparency and more focus on customers?
JB: Current accounts, for any bank, are not a particularly profitable activity. While switching is important, and people will move, the debate around what customers pay for versus what they get will continue to evolve over the next few years. I think we will continue to see HSBC and other banks looking at what the package of services is, and very transparently how the banks get paid. I can easily imagine people getting a much more transparent and useful set of banking services, and it being charged in a much more transparent way going forward.
Econsultancy best practice
Online impressions count
Generally, people’s impressions of banks aren’t too positive. The credit crunch, bankers’ bonuses, overdraft fees and call centre queues are common negative associations in people’s minds. However, digital does offer some opportunities for banks to improve the way they are perceived.
First Direct, a subsidiary of HSBC, has a reputation for great customer service. It regularly comes top in consumer polls, with 93 per cent of customers saying its service is ‘great’ according to MoneySavingExpert. Its nearest rival, the Co-op, scored 76 per cent. Most high street banks struggled to beat 50 per cent.
There is one reason for this: First Direct actually answers the telephone when it rings. With no branch network, it has focused on providing an excellent all-round experience, especially online.
Its social campaigns are daring and innovative. Take First Direct Live, for instance, launched in 2009. It turned its site into a repository for customer feedback, a very brave move in the wake of the financial crisis but one that paid off.
The site works well, too, making it easy to check balances, transfer funds and so on, but it is mobile where customers really feel the benefits. Mobile and online banking frees customers from the need to call into branches or take to the telephone for most common transactions. It saves them time, and thus enhances their lives in a small way.
Indeed, a recent Bain report on customer loyalty in banking found that mobile and online banking are the areas most likely to ‘delight’ customers, increase their loyalty and make them more likely to recommend a particular retail bank.
While some banks were slow to launch mobile banking, most high street banks now offer this service, to the extent that it will soon become a hygiene factor – people will not consider opening an account if their bank doesn’t offer this.
Younger age groups are particularly keen to access their money via mobile. According to Tealeaf stats, 57 per cent of 25 to 34-year-olds and 53 per cent of 18 to 24-year-olds in the UK say they have accessed banking on smartphone or tablet, either via app or mobile web.
Under closer scrutiny, smartphone apps are the most popular mobile way of accessing banking services for both of these age groups, with 22 per cent and 25 per cent of each group doing so respectively.
In the digital age, where bad news spreads fast on social media and consumers trust reviews and recommendations from friends and family above all else, customer experience is all important.
For banks, providing excellent experiences on mobile and desktop is perhaps the best form of marketing there is.
Josh Bottomley, CV
May 2013 – present Global head of digital, HSBC
2011 – 2012 Global head of display advertising, Google
2005 – 2011 Managing director, LexisNexis
2002 – 2005 Chief executive (Europe), International Masters Publishers
1999 – 2002 Group director and managing director, Financial Times Personal Finance, Pearson
1994 – 1998 Engagement manager, McKinsey & Co
1990 – 1993 Financial analyst, mergers & acquisitions, Goldman Sachs
1989 – 1990 Marketing executive and board executive assistant, Telegraph Media Group