It’s fun when you can go somewhere new and see different ways of doing things. For example, where you live, ‘buttery’ is an adjective, or perhaps a building, but in Aberdeen, a buttery is a quite remarkable baked good. It is particularly fine at soaking up a night’s overindulgence when the bakery opens on George St at 5am. Forgive me, student reminiscing.
Anyway, I was lucky enough to spend a week in Australia recently, speaking at a conference near Sydney on how the UK platforms market has diverged from the model that our Antipodean friends sent over a decade or so ago. We might get back to some of that in a bit.
During my trip, in a not entirely unpleasant jet-lagged sort of pink fug, I went for a wander around Sydney’s central business district to see what I could see. Finding no immediately apparent wombats, Western Grey kangaroos, or dunny spiders, I stuck my nose into a branch of a financial services name I recognised – Westpac.
For those unfamiliar, Westpac is a big ol’ bank – one of the four that dominate the Australian and New Zealand market – and offers all the banking stuff you’d expect. It also offers a platform through its BT Financial Group (not British Telecom, at least I don’t think so) wealth management subsidiary.
Australia is a much more vertically integrated market than the UK, although this might be changing as FoFA (Future of Financial Advice), the Australian equivalent of RDR, makes its way through the system. Banks are banks, and platforms, and salesforces, and investment managers, and superannuation providers, and all sorts of things, and nobody seems to mind too much because that’s the way it is.
Over here, I’m fond of saying that if the banks could find their collective backsides with both hands and a map they’d be dangerous. In Australia they must have GPS or something, because what I saw in a Westpac branch in Sydney blew me away.
Interiors
If you’ve ever been to an Apple Store (and as I write this Tim Cook has just announced his new watch, which seems to me slightly less exciting than my old Casio calculator watch with all the buttons) then you’ll understand what a Westpac branch feels like. It has high-ish benches – few seats – with serried ranks of iPads upon which you may do your day-to-day banking but also look after your investments on your platform.
The cashpoints in the branch will convert coins to notes, allow you to deposit money into any savings vehicle you have (including platform-based investments) and also withdraw money from your ‘super’, once you’ve reached that stage. There is lots of blond wood and white walls, and I saw in the one little branch I visited for 15 minutes (they were about to call the police) probably a dozen folk drift in and out, do what they needed to do and wander off. There is no paper.
No surface, all feeling
I couldn’t play with the apps themselves, but I’m told by folks who know that they’re pretty good. But that doesn’t matter so much; and even the fondleslab approach wasn’t what got me. It was where the branch design jumped from app-space to meatspace (real people) that I thought the power lay.
Sitting up at what resembled nothing more than one of Apple’s Genius Bars were two, quite frankly, attractive people (one of each) in Westpac-branded shirts, helping folk with what they needed. I’m told that these guys are tied advisers, who can help with basic needs, including transacting products. But if the client needs proper advice, they act as a referral service to the correct wealth management division. As I watched, people were genuinely keen to interact with these guys, who also had iPads. They were relaxed, professional, friendly, clearly very corporate, but as someone remarked to me at the conference – if you’re going into a Westpac branch to sort out an issue with your BT Westpac super on your BT platform, then what do you expect?
A design for life
I don’t know if the products these guys deal with are any good or not. But I do know good design when I see it – Westpac spent AUS $240m on the initial fitout of what it calls its ‘Bank Now’ branches and a new CRM/teller system called ‘Spider’ (the name of which makes me think of a big tattooed biker, but there you go). Money does not create taste, but I was genuinely excited to see the interplay of well designed and very functional technology which straddled banking and long-term savings and investment, and human intervention.
Deep breath, and back to the UK.
I said earlier that our wrap model had come over from Oz, and so it did. Whether you look at Transact, the granddaddies of the market, here, or the outsourced platform tech providers – FNZ, GBST and Bravura, all of whom come from a very long plane journey away – you can’t escape the influence of the Antipodean market. But the UK is much more complex in terms of regulation and products than Australia, and as a result our wrap market has got increasingly more sophisticated, which is a nice word for complex.
Everything must go – online
We have also been obsessed – probably correctly – with driving cost out of our models by driving everything online. More damagingly, providers – especially the big lifecos – have delegated interacting with customers to advisers for a long time. Now the sunset clause is coming into being, many of these firms are waking up, and are believing their own customer-first twaddle which is printed up on their walls along with pictures of happy children on swings (this is not an exaggeration), and trying to take over direct relationships by fair means or foul.
It seems to me that in the vertically-integrated, bancassurance-like model of Australia, there is a sort of balance, and I wonder if that couldn’t work here. We’ve been working with one major direct platform on marketing strategy, and one of the things that keeps coming up is jumping from online to real-world stuff. I’d like that firm to do pop-up platform stalls in shopping centres. If I did convince them I think I’d try to make it look like the Westpac branch.
So what does this have to do with advisers? I think it’s a trust thing. What if, in the fullness of time, we had divorced the discipline of financial planning completely away from the boring stuff of adding money when you get a bonus, or checking your values, or even withdrawing a bit? What if a provider, maybe even a big one, could offer what hipster marketing types might call ‘experiential marketing’ – a way to jump from pure online to something you can visit and touch, while preserving and retaining the adviser relationship through really good CRM links? Might that work well for the ‘squeezed middle’ in the advice gap?
None of this is easy. But what I observed through my pink fug in Sydney was that customers – of a range of ages, genders, ethnicities and what seemed to be socio-economic groups – liked the idea of doing their online financial maintenance in a dedicated space where support was readily available. We forget sometimes that what is second nature to us – the abstract and intangible nature of financial services – is deeply freaky to lots of people.
As ever, we think inside out. Maybe there’s another model we can bring over, one which recognises that a mixture of old and new can work really well. And in return, we can send them the recipe for butteries. Deal?
Mark Polson is principal of platform and specialist consultancy the lang cat
