Digital-BankingEasy

3 min read · 526 words

What the seat actually does

Somebody decides what a current account costs, what it pays, what is bundled with it and what happens on the screen when a customer opens it. That is this seat: the product rather than the sale.

It is an economics job wearing a design job's clothes. Each account has a cost to acquire, a cost to run, and a stream of revenue from balances, fees and interchange. Whether the product works is whether those three line up over the life of a customer, and almost every visible design decision is really a decision about one of them.

• Pricing — fees, rates, and what is given away to win the customer.
• Onboarding — the path from download to a funded account, and where people stop.
• The proposition — what this account is for, which is the part that decides who applies.
• Retention — measuring who leaves, when, and after what.

A day, and where it goes

• The funnel. Applications started, completed and funded, and which step lost the most.
• Cohorts. What the customers who joined six months ago are doing now, which is the only honest read on a promotion.
• Complaints and support volume, read as a design signal rather than as a service one.
• Release and incident — what shipped, what broke, and what a bank is required to report when it does.

What it is measured on

• Cost to acquire against value over the relationship, which is the whole business in one comparison.
• Funded accounts, not sign-ups. An account with no money in it is a cost.
• Balance per customer and how it moves, because that is where most of the revenue is.
• Churn, and what preceded it — usually a fee, an outage or a rate somewhere else.

What it touches on this site

• What the account competes with — money market funds and where cash actually sits.
• The rest of the bank — deposits and payments, which turn these balances into funding, and technology, which builds what is designed here.
• What a promise has to survive — investor protection, and the deposit guarantee behind a banking licence.
• The behaviour — behavioural finance, which is this seat's subject whether it is named or not.

How it goes wrong

• Growth bought with a rate. The customers a promotion brings in are the ones the next promotion elsewhere takes away.
• A design that makes a decision for somebody. A default that suits the bank and not the customer is a design choice with a regulator attached.
• Onboarding built for the good case. The path works for whoever fits the template and quietly fails everybody else.
• Measuring the sign-up. Counting applications rather than funded, retained accounts flatters every launch ever made.

Concepts to master

• Unit economics over a lifetime, not a launch — the arithmetic is the same shape as IRR and NPV.
• A free account is paid for somewhere — see costs and fees.
• Deposits are funding, so a product decision is a balance sheet decision.
• Defaults are decisions. Whatever the screen pre-selects is what most people will hold.