“The idea of financial institutions building everything in-house is no longer a viable solution. Going to FinTech and tech specialists creates a division of labour and specialisation which enables the improvement of service capabilities.”
Insightive.tv: Can you begin by speaking about recent innovations within your payment service platform? How digital is the entire operation?
John: Because of the nature of the Bank, there is a lot of variability in that answer. Raphaels offers sponsored access to several payment systems for third party partners. Through that, we have a variety of different products, some are offered exclusively online, some are offered through agencies or through high street branches. If you think about the branch programs, they are relatively paper based. Digitisation and changes to the contracting process have mostly occurred in programs we offer online.
We always support our program partners to create the most appropriate onboarding experience. Most of these are now online offerings, such as Travel Money Card — which is a fully digital onboarding experience. The main challenge is getting the balance right between the level of information given to the customer, whilst ensuring it is accessible and easy to understand.
Insightive.tv: How does the relationship with co-brand partners generally work? Who develops the technology? Are there additional contractors involved in the process?
John: The tech is usually provided by our partners. For example, we have a partnership with Vodafone that facilitates their pay program. They are the brand on the front, but they are not regulated for payment services. Raphaels is the issuing bank for the payment devices that enable the service to work. The terms and conditions for the payment service are between us and Vodafone’s customer. The technology behind the app is provided by Vodafone and a third party processor. So there are different moving parts within that particular program that enable us to capture customer information and obtain the necessary approvals for terms and conditions before we move into providing the service.
One of our most recent projects is a partnership with TransferWise. We were able to combine their technology and innovation with our established relationship with the Bank of England and our recent membership of the UK Faster Payments scheme. Our ability to sit behind TransferWise, providing settlement and ensuring compliance, allows us together to provide a smooth onboarding experience, excellent technical solutions and, ultimately, first-class cross-border payments that neither of us were fully capable of delivering alone.
Insightive.tv: Are there operational challenges to controlling so many different moving parts that come together to create the customer journey?
John: Partnerships are a huge part of Raphaels’ business. From our perspective, ensuring success is about getting to know who you are working with, particularly the operations and regulatory teams. Learning whether a company is just putting processes in place to be compliant or if they are genuinely interested in delivering a complaint service is a valuable insight that can only be gathered from getting to know your partners and maintaining that relationship.
I think the nature of banking is moving that way generally. The idea of financial institutions building everything in-house is no longer a viable solution. Going to FinTech and tech specialists creates a division of labour and specialisation which enables the improvement of service capabilities. We are not a huge bank, nor do we have thousands of partnerships, so we are in a good place to make sure we have healthy and regular contact.
Insightive.tv: Through digitisation, what are the key outcomes you are hoping to achieve, and what are the main drivers behind innovation?
John: The key outcome is enabling a customer to understand what they are getting and how that service is being provided. Customers need to understand the terms and be provided with a simple process that leads them to purchase the right product.
Technology is really there to improve the customer experience — that is both in terms of speed, as well as the method by which information is presented.
I think the drivers to onboarding, and digitising customer contracts, are largely led by customer demand. Competitive pressure has to be looked at the same way. For any business, you need to be able to anticipate what your customers want next, otherwise you are going to find yourself on the back-foot not necessarily with your competitors, but with your customers’ demands.
Regulation also has an impact. For example, PSD2 is likely to open up more channels with payment initiation service providers, and account information service providers. In essence, these are just additional channels for people to use and obtain information from their financial service providers, and they are going to need different contracts that account for different liabilities to customers incurred through offering those services.
Insightive.tv: Do you envision a point in the future where your customer journey will be fully digital, end-to-end?
John: Depending on the product, I think yes. Across Raphaels, further afield from payment services, some of those products are absolutely made for digitisation. There are things that we can do to improve our customer onboarding process. But there will always be a remaining requirement for non-digital products simply because of customer preference. Ultimately, we need to think about the requirements of particular customer sets on a product by product basis, and that is an ongoing process.
Our onboarding to Faster Payments was the first major upgrade that Raphaels has undertaken in the last ten years. Doing this gave us an opportunity to look at other systems — not just the technical connectivity to the payment system itself, and we have been able to bring new software in that has automated certain processes, reduce manual intervention and increase the accuracy all around.
The challenge is making sure that a customer has all the information they need, in the appropriate format — and that is difficult on a mobile phone. When you are onboarding a customer through a mobile app you have a four-inch screen. Large print quickly becomes small print on a four-inch screen. It is about working with technical providers that can come up with innovative solutions for supplying information in the best way.
We also have to take into consideration that we work across the EEA in multiple jurisdictions. These have different requirements, creating a challenge operating a recognisable and uniform customer onboarding experience that remains compliant with the individual jurisdictions.
I think people in financial services are uniquely placed. We are all consumers of financial services as well — so we share frustrations with customer journeys. If you couple this personal understanding of the products with an understanding of risk and the regulatory environment, then I think Raphaels is well placed to rise up and meet these challenges. There is so much innovation, it remains a very exciting industry.
John Box is Head of Strategic Partnerships at Raphaels Bank and deputy Head of Payment Services. He has worked with the bank since 2012 and has experience working in project management for companies such as Visa Europe , Lloyds and Nationwide. We spoke with John to gain insight into how Raphaels is transforming payment services, and how digital contracting is impacting these developments.
Raphaels Bank is one of the oldest independent banks in the UK, tracing its foundation back to 1787. Today they offer dynamic savings and lending products and maintain a network of multi-currency ATMs. But the Bank’s Payment Service division is their market-leading operation that has taken on board the digital innovations of the last few years to offer a unique service proposition.
THE DIGITAL FUTURE OF CUSTOMER CONTRACTING series