Banking as a behavioral science

Bill Gates is attributed to have said: “Banking is necessary. Banks are not,”. I think what he meant was that we need banking services, but banks are not delivering what we need. Surely this cannot be true? If we look at the scope of services that we get from banks, all kind of products, different types of transactions and so forth, then we should be able to find what we need. Many would agree (I think) that the question is not WHAT, but HOW banks deliver their services that is important.

In a recent article called "Redesigning banking with behavioral economics in mind" (Read here), an approach to the establishment of a new bank is described. Rather than thinking about what customers need, designers are thinking about what customers would enjoy. The emphasis is to ensure a positive experience and to remove those things that frustrate customers. In order to do this, more emphasis is given to the behavioral science than banking.

The article refer to two case studies that have made use of this approach. The first is a new start-up bank (expected launching date next month), called BankSimple and the other PNC financial services (Bank of the year 2010 in the US, according to the Banker).

Interesting concept.