Why does banking experience in Canada suck so much? One way to think about it is to think that Canada’s banking is outdated and the better ways are yet to come. In this version of history, things are done the way they have been done for decades (or sometimes centuries) – COBOL, paper cheques etc.
This classic narrative on Canada’s “medieval banking system” is true in many ways. But it is incomplete. What if tells a great story, but it doesn’t tell the whole story. It works because it’s simple: old stuff sucks, new stuff is great, use new stuff.
What it doesn’t explain is this: the new stuff is here, but people still use the old stuff. Why?
One answer is that they are unaware. If that’s the answer, the solution that follows is more advertising. This works if the underlying assumption is correct and the new products are actually superior to the ones they aim to replace.
Another answer is that the new products are not obviously superior and more work is needed to make them competing. If that’s the answer, the solution that follows is more engineering and product improvements. If the assumption is correct and the new products become indisputably better, a switch would follow.
Reassessing the status quo
This is not just about legacy systems, and old school experiences – there is a whole new generation of apps, new products and digital experiences that are a total disaster. In fact they are so bad that going to a branch and standing in line works better.
When KYC/AML/CTF creep is not matched with UX improvements, new products and experiences are often worse than the ones offered in 1980s. From forced 17-layer MFA and requiring 1839-character passwords that must look lie this: #$)@_**@#*88, to voice verification and other things, technology is being used to make things difficult and frustrating when it can be used to make things smooth and easy.
There is no such thing as a failed log in attempt at a physical branch. Even in rare cases when it’s possible to fail, the success rate of reaching a human when going to a branch is very close to 100%.
I think of it as a cycle: horrible digital experiences drive people to branches, where horrible physical experiences drive them towards using online solutions. Both suck, and there is no win, but different people would rather suffer a different kind of pain. It’s a choose your poison game. A lot of younger folks would rather swear at their phone screen fighting their app than stand in line. For a lot of the older folks, it’s the opposite.
Physical or digital, legacy or new, there are two common things here: horrible products that are impossible to use and equally atrocious support.
Why pays fees when no-fee products are available? Forget the neobanks, why do people use CIBC with fees when Simplii from the same bank has no fees? Why do people use Scotia when Tangerine has no fees? Why do people use TELUS when Public Mobile (owned by TELUS) does the same thing cheaper, on the same network?
A key thing that matters to a lot of users is support. Support itself is a form of product and fees are a way to get it. Paying fees solves the problem of not worrying about being stuck with no support. If support is a product, one can think of it as an insurance product. If the app doesn’t work, one can go to a branch. If the transaction fails, at least there is a number to call.
Can Neo productize its support? If support was a bundle, would anyone buy it? How much it would cost and what would it offer? Would it be 24/7? Phone support? Super smart AI support that solves all the problem for you? All of the above?
This is not to suggest that support should be a paid feature here, but to suggest a way of thinking about it in the spirit of “make something people want”. Can support be so great that people would voluntarily pay extra for it? Can it be so great that competitors would want to outsource their support to Neo? Amex has certainly put a lot of effort into doing something great with support and this is how they pitch themselves “Amex Bank of Canada delivers the kind of high quality service you can only get from American Express.”: While it takes a month and three (!) paper mail envelopes to start using a card, there is a 24/7 line to complain about it.
In a perfect world, all users would have perfect support available all the time for free. Something like this:
(note how instagram-style story mode allows to squeeze in more content in a subtle, non-obnoxious way)
One thing you can try is to test some kind of a “premium” support for premium product users. This can be used to get more people to pay for premium products initially and generate more revenue to provide better quality support to all users, which would in turn bring more users to the platform.