David Judic, Head of Customer Innovation, CYBG

With the FinTech world bustling with increased personal finance management (PFM) tools, the big challenge becomes standing out from the crowd and encouraging switching and retention. Similarly, around the world, incumbent banks have begun playing in this space, leveraging that position of trust and customer recognition. A pioneer in the space, and straddling both sectors, is CYBG’s digital-first brand B. RFi Group’s Sarah Hollinshead caught up with David Judic, Head of Customer Innovation, CYBG at Studio B, B’s high street innovation lab to discuss experiences of B over the last 2 years and how it can build on its success.

B has proved to be an incredible success for CYBG. It was launched to attract a younger, more digitally native demographic, and was co-created with those target customers. As the benefits of that approach are clear, beyond just being a service that customers “try out” once or have in addition to their main banking service, this offering is the customer’s first choice, for example, the average current account balance of over £2k and deposit balance of over £7k.

“The most important thing for us is how customers are actually using B. We find that most of the customers use it as their main banking service, which means that those customer numbers are real customers, they’re really engaging with our service.”

This, of course, presents a much longer-term gain for the business model, with customer feedback being more meaningful.

“Our customers are really helping us to develop our service and over time, the engagement and the positivity that they give off around the proposition and the brand will help us to maintain this really game-changing approach that we have brought to market.”

B is all about helping customers to engage with their money in a positive way, removing the fear and negativity, and helping customers to get “financially fit”. A fantastic example of this in real terms is the “B-tox” campaign.

“We want to help educate people and to have fun with the money that they have got, rather than to worry about it. There was one story about a father in the army, and a wife at home with 2 children that is remarkable and makes this seem really worthwhile. Prompted by B-tox and the budgeting and saving pots features of B, the family put £1 for every day that their Dad was away on a placement into family day savings pots to use when the Dad is back. All the pots are for different days out, which is much more motivating than a non-descript savings account.”

PFM tools have been discussed by the industry for a number of years, however, they are only now starting to truly resonate with customers, and the number of players in the market is increasing. David shared his view on this shifting paradigm.

“Our customers are really helping us to develop our service and over time, the engagement and the positivity that they give off around the proposition and the brand will help us to maintain this really game-changing approach that we have brought to market.”

“I think the first reason behind the slow progress is that it has never been that easy to do in a way that is meaningful for customers. We were inspired at the start by the likes of Mint in the US, but the regulatory environment in the US is quite different to that over in Europe. Now with the likes of PSD2 coming along, customers are becoming more open to tools which help them safely and securely manage their finances. There is no surprise that PFM has become more pronounced.”

Changing regulation is playing a major part in the possibilities of PFM tools, having access to more data allowing for a more personalised approach.

“No one wants generic information, nobody wants information a day after they needed it and I think PFM has struggled a little bit from that in the past. The opening of APIs between banks and non-banks promises to make that a much easier real-time process.”

When considering the specific success of B, David highlights the unique position of the app as being both digitally led but supported by a full service financial institution.

“The most important thing in banking is trust, and despite everything in the last 10 years, there is value and trust in banks that they will look after customers data and rightly so. Banks are heavily regulated and look after that data very well. If you have to give that data to a third party to have an effective PFM solution, it makes people nervous.”

“The most important thing in banking is trust, and despite everything in the last 10 years, there is value and trust in banks that they will look after customers data and rightly so. Banks are heavily regulated and look after that data very well. If you have to give that data to a third party to have an effective PFM solution, it makes people nervous.”

“We have seen a lot of propositions come to market, grow quite quickly in the early stages and then hit a ceiling when the volume of early adopters who are willing to share their data runs out. Then you hit the mainstream who want to keep their data close to their chest.”

With this, the challenge becomes for FinTechs and banks alike to balance that customer experience with maintaining that trust.

We have got to be really careful not to rush into super exciting things which may appeal to a small segment of customers, but which will actually amplify fear in a broader segment of customers. Once you lose trust, it’s so difficult to get it back.”

In this unique position, David went on to explain the additional benefits of B to the wider CYBG banking proposition, an interesting consideration given many other UK banks are looking to launch their own digital-only banks.

“B has been so important for CYBG, I cannot understate it. We floated as an entity just at the point that B was about to go live. We had been a subsidiary of National Australia Group and having B, both the platform and the brand, was something really exciting that helped to galvanise a huge amount of support from our investors and galvanise our staff. That support continues to this day.”

“B has been so important for CYBG, I cannot understate it. We floated as an entity just at the point that B was about to go live. We had been a subsidiary of National Australia Group and having B, both the platform and the brand, was
something really exciting that helped to galvanise a huge amount of support from our investors and galvanise our staff. That support continues to this day.”

With technology consistently evolving and becoming more open, B has some exciting times ahead. Unsurprisingly, an aggregation tool is amongst the new developments, and David explains he believes this will be emulated across the ecosystem.

“Banking aggregation is a pretty obvious next step for a PFM tool within a bank, so that is going to be going live relatively soon. I expect every bank and FS provider to underpin their offer with some form of aggregation, so it’s going to become a hygiene factor very quickly.”

Another significant move is into the business banking space, with an SME offering build around the same core principles of B.

“There is a whole heap of exciting SME focused developments which are going to start to go live later in the year, introducing B into our business customer base. And because we invested in a new platform for B, some of these developments could then quickly be offered to Retail customers. A real benefit of being one of the only banks in the UK that have both offerings sat on the same platform.”

This kind of innovation and opportunities afforded by being a full scale, full-service banking entity really separates B from the FinTechs, and also from the banks, who are potentially less able to deliver this quickly. And with B celebrating its second birthday, it is already in a much more developed state than many other digital-only platforms coming to the market. It has certainly set the tone for PFM tools of the future and continues to be a force to be reckoned with.


To read more interviews by RFi Media in all past UK Retail Banker editions, follow @RFiMediaGRB on Twitter or feel free to visit the archive centre on our website: www.rfigroup.com/rfi-media/magazines

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