This article is written by Eleanor Hill for Banking Technology, which provides news and analysis of the global fintech sector.
Amid the hustle and bustle of MoneyConf in Madrid, Banking Technology's editorial contributor Eleanor Hill managed to grab a coffee with Matteo Cassina, global head of sales at Saxo Bank. Conversation turned from the demise of bank branches to the rise of artificial intelligence (AI) and open banking.
Cassina hasn't been into a bank branch since 1998. Even then, it was an exception - he was moving to the UK and needed to sort out some paperwork.
"Digital disruption is only just starting to happen in earnest," says Cassina. One of the reasons for this, he explains, is that digital natives - like the millennials - haven't been important enough to banks in the past as they haven't had enough wealth. Now that they're maturing, earning well and running their own businesses, banks are having to wake up to the fact that customers want, and demand, a great digital banking experience.
That was around the time that online brokerages were starting to become a phenomenon. Many analysts were also predicting that retail banks would soon shut down their branches and only have a digital presence. Fast forward to today, and despite all the technological advances, including the rise of the smartphone, that discussion is still ongoing.
It's not just the younger generation that is driving digital forward, though. Cassina says that his father, who is 77 and has never sent an email in his life, is able to use digital banking thanks to the user-friendliness of tablet technologies and the artificial intelligence (AI) that banks are building into their platforms. "People of all ages are realising that digital allows them to have information available at their fingertips - and that's very empowering."
Cassina believes that the way information is presented digitally - with pie charts and drill down data, for example - is also leading people to be more engaged in their savings and pensions. In turn, this is opening up a world of opportunities for banks.
"With an engaged and captive audience, there is a significant cross-sell opportunity, whereby banks can use tech to predict the next best step in the customer journey. If the customer has recently made payments to a travel firm for a holiday booking, for instance, the bank could then offer them travel insurance," he explains.
There is a danger, however, that AI will push people to buy products that they don't actually need. According to Cassina, "The tech will eventually be so intelligent that it will detect when someone is in the back of a taxi, for instance, and start trying to sell them insurance for that journey and almost instilling a culture of fear - as if the customer is making a mistake or missing out if they don't buy in to the product." The technology may also become quite invasive, he warns, whereby it predicts which times of day a customer might be more susceptible to making a purchase.
In Cassina's view, AI should be less about the art of the digital cross-sell and more about adding value to the customer. At Saxo Bank, an institution known for its online trading capabilities, this means keeping customers up-to-date with dynamic and personalised information relating to the markets and risk management.
"I don't mean sending out alerts when, say, Tesla issues its results," Cassina clarifies. "Anyone can do that and hundreds of thousands of companies do. What we want to do is ensure we only send information that is relevant...
This is an excerpt. The full interview is available in the July/August 2017 issue of the Banking Technology magazine.