John Godfrey, commercial director at Red Badger, explains how AI, interoperability and “radical simplification” are converging to shape new products and services that meet and exceed consumers’ digital needs.
1. Firstly, what is your role at Red Badger?
My title is commercial director but my role is to ensure our consulting teams, made up of deeply capable product engineers, product designers and strategists, get the opportunity to do great work they love. The reason Red Badger exists is to balance joy, quality and prosperity. I own the prosperity corner that enables the high-quality work our clients value deeply.
2. How does Red Badger work with banks and other blue chips on their digital transformation journeys?
We believe all companies are digital product companies, whether they realise it yet or not. The rise of the neobanks and direct-to-consumer (DTC) brands have shone a light on how customer-obsessed, product-led growth wins market share. The businesses that do this well are wired differently.
We see our work for the likes of HSBC, Santander, JPMorgan Chase, Selfridges, Levi’s, OVO etc. as well as new entrants, as key to helping them innovate continuously at scale.
3. What are the big developments you are seeing in consumer behaviours?
From a consumer demand perspective, we see three major shifts continuing to gather momentum:
- Cost-of-living pressures are squeezing consumer habits and they are looking for ways to make their money go further.
- The desire for sustainable options continues to evolve with carbon reduction (energy efficiency) and circularity (up-cycling, re-cycling, vintage) trends gathering strength.
- Digital expectations, cemented during work-from-home over lockdown, now drive a desire for experiences ‘that just work’. This shows up as a frustration with systems that do not integrate well and customers adopting or migrating to the promise of newer, seamless products, such as digital neobanks, easy checkout processes, and embedded finance options.
4. What key changes have you seen in the past year to companies delivering these services?
In our work building new products and services for millions of customers, we have seen three trends emerge and converge.
- AI has crossed into the mainstream and every corporation is experimenting with the impact on:
- customer experience – for instance, in new sales and customer help journeys, and
- in employee experiences, whether in software engineering, content development or complex analysis and workflows.
- Interoperability has become a mainstream approach to developing products and services. Whether Open Banking, embedded finance or API-as-a-product, the innovation in these spaces is accelerating. Taking full advantage means developing highly modular services and technology that can deliver anything, everywhere, all at once. Much of the traditional technology that heritage banks and brands rely on continues to be a constraint, consuming resources and restricting innovation.
- An emerging trend towards radical simplification. Much of the technology deployed to deliver consumer offerings has become cumbersome, with complex technical estates required to run cross-platform apps at scale. For example, a large retail bank needs multiple teams optimising their iOS, Android, and Web experiences as well as their core. We see a wave of app modernisation and refresh of the digital experience layer delivering these apps, based on proven new technologies that are faster, cheaper, safer and higher quality to build and run. Big tech is already on this journey and enterprises will follow, as the opportunities for cost reduction and increased flexibility are too large to ignore.
5. What do these changes in consumer demand and enabling technology mean for the future?
On the surface, embedded finance, AI, sustainability, Open Banking, and cross-platform app technology may seem like a strange collection of bedfellows. But we see how they are all part of a joined-up story. Let’s take embedded finance innovation as an example. Imagine a bank opening up new opportunities in its consumer offerings, while also developing embedded finance and merchant innovations. They may be seeking greater customer loyalty, increased cross-product spend and new routes to growth.
Thinking about a new customer experience, perhaps they integrate a carbon tracker into their mobile banking app, such as that by Cogo in the NatWest app, enabled by Open Banking. This could trigger a customer journey that explores energy efficiency for the home. An AI-guided chat can lead a customer to consider upgrading to solar panels, a heat pump, and a home battery. Finally, an embedded finance option – with advanced affordability checking – can sort out long-term financing options. Managing this as one seamless customer experience is entirely possible today.
The customer experience happy path for this journey would be compelling and straightforward for any customer. But under the hood it is a complex customer journey to deliver, perhaps across multiple devices over a long period, integrating many third-party systems to internal systems, and success would rely on personalisation, curated content, real-time data and identity services, among many other components.
All the components necessary to deliver it exist in the market today. For the provider the work will be in designing the right thing (journeys that delight customers) and building the thing right (a flexible, easy to build and run digital product that works at scale).
We see the range of innovation possibilities expanding, while the need to preserve margin growing. This will mean a continuation of product-led growth for the incumbents as they transition to continuous innovation to compete with digital natives.
Catch Red Badger at Open Banking Expo UK and Europe on 18-19 October at the Business Design Centre in London – find out more about the agenda and get your pass here.