What can banks and insurers learn from slow food?
May 19 • thought • written by James
I love the slow food movement. As food in general has got faster, slow food has encouraged us to go the other way. To take a beat and think about where our food comes from. To savour a flavour without rushing. We can still eat fast food when we need to, but we can also go slow when it’s worth it.
It may sound like a stretch, but I reckon larger banks and insurers should try a similar approach. Rather than rushing to emulate the neo banks, promising frictionless or at least very fast interactions across all their journeys, they should consider varying the speed a bit.
If this seems like an analogy too far, let me explain…
Over the last decade banks and insurers have become much simpler to deal with. Transactions that might previously have taken days can now be accomplished in minutes. However, if customers’ financial capability has not improved over the same period, these new digital experiences are just enabling them to make mistakes faster.
I say this as someone who makes plenty of mistakes. Recently, I had an embarrassing moment when I called to make a claim on my contents insurance. I had checked my documents and, based on what I read, I thought I was covered. It turned out I was not.
If that can happen to me, after working in insurance for years, then it can happen to a lot of people. In fact, I know that the number of claims that are, in the parlance, “repudiated” or turned down, is much higher than you would think. It seems that we know enough about insurance to get by but there are plenty of gaps that surprise us.
The answer, surely, is to redesign the experience and rewrite the copy with customer comprehension as the goal. Instead of trying to explain the policy, perhaps we could start with the way customers really think about insurance. Which is to say, as little as possible, and informed by stories from friends, family, and the media. The same way that people always make sense of complex issues.
It might also mean adding odd spots of useful friction, encouraging customers to take a beat and reflect on what they are buying. Slowing down a moment to speed up later, with any momentary delay or reduced conversion, compensated by improved satisfaction and a faster, easier, claims process later.
The case for banks is similar. Some tasks can be accomplished quickly with very little reflection. Other decisions though, like taking out a loan, can have long lasting consequences. In the race to simplify every process, it’s worth considering whether it’s a good idea for customers to make consequential financial decisions on an app while they are waiting for a bus.
In research, I’ve seen customers describe the feeling of applying for a loan in an emergency. Excited and anxious, and in a rush to solve the problem, they do not stop to consider whether this is their only option. If the process was a bit slower, perhaps involving a conversation or a meeting in a branch, they might make a different decision.
Maybe this is one of the reasons why customers still visit branches? Looking for a more authoritative and serious process, trying to satisfy a deeper need. The process itself may take a little longer and cost a little more, but that should be weighed against the quality of the attention paid to the decision and the outcome at the end.
In summary so far.. We think insurers should go a bit slower to improve comprehension. And perhaps banks can go slow to add important context. On top of that, we would like to propose one more characteristic that benefits from being taken slowly. That is social connection and community, or even mutual support.
It may seem strange now to talk about community in a banking context but historically it would have seemed very natural. Credit unions, for example, are rooted in communities, and rely on local savings to be able to offer small loans. And recently, the Financial Capability Lab run by the Behavioural Insights Team, found that social support, including initiatives like “savings buddies”, are an effective way to build peoples’ financial resilience.
So that’s our case for slow money. A recognition that as we simplify and make finance more efficient we risk reducing the quality of attention. And a hope that a new approach to innovation, emphasising collective knowledge, context, and social support, could help customers build it back.
all photos by Timo