Repurposing and redefining the banking phygital experience — the financial experience of the…

(The Future X Smart Store by SK-II)

Repurposing and redefining the banking phygital experience — the financial experience of the futureNext banking revolution won’t about the next nicely designed app but about the way people interact with the concept of money/ value and how they can experience it in a new, engaging and phygital way.

Banking on decline

As people are less and less interested in the traditional way of banking and largely perform most of their financial operations such as depositing a check, cashing a check, or making a transfer via their mobile phones there is still a large amount of population that visits their local branches. 84% of banking customers still visit their local branch at least “occasionally,” according to a Federal Reserve report. When it comes to more complicated operations such as taking a loan people still prefer to talk to someone in person. It would be unwise to close the physical branches for the customers since there is a demand for in-person services.

Here comes the opportunity to repurpose the physical branches and create a bridge between the physical space of the brand and digital banking. It might seem straightforward to think that with the decreased amount of physical interactions people have in bank’s branches people would value less the experience they receive at the spot. On the contrary, people became even more concerned about the physical experience they encounter in regard to brands since these interactions are so few, the expectations are much higher and more determining. And banks are not the exclusion in the competitive space of retail. I do believe that with the increasing amount of fin-tech applications the brands that will expand to the physical space will win their customers. Nothing is as much important as the tangibility of the brand and building trust especially when it comes to money matters.

40% of Millennials say they would consider banking with Google and Apple, while 36% would buy insurance from them and 46% would look to them for investment advice (source: Accenture). It is because these technology giants have become experts in tailoring their services to the individual needs of the customer.


They said they wanted simplicity and convenience, plus a more personalised service. Despite recent data concerns, it appears we want our banking to be as modern as our Instagram account. 


The meaning of experience and the competitive space of retail

“Banks are not just competing with other banks anymore,” says Shires, “they are competing against the experiences that consumers have when they walk into an Apple Store or when they buy a latte at the hip coffee shop that accepts mobile payments.” And with the recent announcement about the apple credit card, it seems even more inevitable that tech giants are out there for our bank accounts. Since they have mastered the user experience to the perfection they have no competitors in that space and people are going to trust them. What is the future of the physical bank branches then? Is the apple going to transform to provide us with the ultimate in-store and in-mobile experience tackling our health, financial lives?

Banks are striving to obtain more customers as well as educate already existing customers and bring new services to their doorsteps. The aim is to create more human-friendly spaces where people engage with the brand on a more emotional level and leave the stereotypical notion of banking system behind. We can see a shift towards “the apple store experience” where conventional banking setup is gone and is being replaced by a friendly, more casual way of engaging with a customer. It embraces the startup notion where the bank creates a product in close collaboration with a customer and leaves the authoritarian facade behind.

To retain their customers in such an environment, incumbent banks have started transforming faster than ever before — and investing in new capabilities and scale to create stronger value propositions.


Capital One bank has opened cafes where you can bank, plan your financial journey over Peet’s Coffee® with money coaches or just enjoy your time there as it is fully equipped to serve as a coworking space.

Umpqua Bank is another example of a new age of banking face. They call their branches stores to get rid of the bank tag from the past. On the contrary to what is happening in the banking field where branches are being stripped from the humanness in response to the digital disruption, the Umpqua Bank is going the other direction by bringing the community together.

“Our locations are about community and experience as well as banking,” Read explains, “and we believe it’s important that our stores add value beyond the transactional.”

“We host events in our stores like yoga classes and movie nights for kids,” says Callahan. “The store is a place for people to come browse, shop, enjoy free Wi-Fi or sit and read. It becomes a community hub.”

The border between what a banking experience is and can be shifted as we focus more on the human experience and how people respond to triggers presented to them and how the design of the space and activities can influence people decisions and emotional attitudes towards the brands.

(The Future X Smart Store by SK-II)

Open Banking and modular architecture

If we think about the current fintech space and current distribution trends it would be logical to think that we don’t need one brand taking care of our entire financial life but rather it would be a set of companies, teams or individuals working in tandem to deliver you all the services you need since one of them is specialized in each separate product and they have the required knowledge and technology. From a large pool of data, they would be able to draw certain trends around financial concepts and deploy services addressing these issues/ trends. The idea bridges from the Open Banking concept but i would rather divert from the concept of a bank and go towards a financial hub idea. But let’s start from defining what is Open Banking.

Open banking is a system that provides a user with a network of financial institutions’ data through the use of application programming interfaces (APIs). The Open Banking Standard defines how financial data should be created, shared and accessed. By relying on networks instead of centralization, open banking helps financial services customers to securely share their financial data with other financial institutions. Benefits include more easily transferring funds and comparing product offerings to create a banking experience that best meets each user’s needs in the most cost-effective way. Open banking is also known as “open bank data.” Source

The financial platform could be created in the image of the open banking where users’ identities are formed and governed and different API’s can be created on top of it. The way these API’s would be deployed would be governed by the central financial identity. Next to the central financial identity, the banking system should also circle around a digital banking platform to orchestrate customer interactions across any touchpoint. Distribution is going to work with a strong core centre. And each branch/ channel within the distribution network has to be properly governed. The central point can align the channels together just like with the central financial identity in order to create cohesive experiences that do relate to each other.

How the financial platform should work is best described in the example below. The platform should know about your current life situation, living conditions and learn about your pain points and know that by connecting these needs with financial solutions you can really make people happy by providing them with tailored solutions. “In an effort to enable more consumers to own a car (which translates to the better potential for meaningful employment), Shinhan Bank Japan leveraged the internet of things (IOT) and GPS technology to limit the risk of loan default. This gold winning innovation for social, sustainable and responsible banking involves installing an IOT device in a newly financed car that can identify the location of the car and deactivate the engine if a customer repayment falls overdue. In this way, the bank limits its risk and expands the universe of consumers who can qualify for a loan”–writes The Financial Brand.

With a modular architecture in place, it’s possible for banks to innovate in the same way — fast and in line with customer needs. A modular architecture empowers a bank to go beyond responding to market realities, to actively creating them — in conjunction with the customer.


In a post-digital world, the concept of money seems to be old-fashioned. People look way more behind what the money can give access to. People seek for unforgettable human relationships, experiences, services that that money can give access to. Money became like a tool to access what people need and desire. Furthermore, in a highly capitalized world searching for other meanings rather than material values seems like a must. The demand for new modes of experiences is increasing. So how would I go about redesigning the monetary/ value experience? Let’s start with by taking people out of money association mindset. Let’s create a relationship with customers that purely talk about their needs and interests and guides them across the spectrum of what might be relevant to them. By learning about the customers you create their profiles and your brand becomes more tailored around these personas. The product should reflect a human and who he/ she is at their core. And money as a service/product is not different here.

“Stefan Heidenreich’s book recently published by Merve Verlag is titled For a Non-Money Economy (2017). What it presents is not exactly a polemic against money, but rather a convincing speculation that soon we may not need money at all. While the notion that currency might soon become obsolete sounds like science fiction to many, Heidenreich argues that we are likely already within the first phase of a media transition leading to that point. Given the complex information infrastructures that have already been developed for documenting transactions, tying consumer habits to identities, and accurately predicting future exchanges, the substructure of a new kind of economy is now in place.” 


The new proposed system would abolish the storage of value and assets, and replace the functions of value and payment with the algorithmically supported distribution of things and activities. The first fundamental aspect of creating a new non-monetary economic system is creating alternative money-less forms of distribution that will spark new sort of connections in vastly connected ecosystems. The amount of data that we produce proposes a solid background for forming a non-money economy. The prices are currently calculated by the algorithms taking into account large amounts of information about users online behaviour, digital trends, economic situation. That information is not effectively used in order to shape the economic systems around us that would reflect the societal behaviours.

Stefan Heidenreich proposes a matching system which carries along with a value-driven system creating meaningful transactions based on individuals needs, possibilities, desires and abilities. The system mediates between transactions, advises participants in their decisions, shows opportunities, accompanies negotiations, and marks the results. Just like two people can be connected by a dating agency, the same way the programmers can be brought together to develop a project, or trucks coordinated for shipping purposes.

Seen from the users’ perspective, every process of matching begins with a desire or a need. The algorithm then suggests various solutions. If one of them fits, the other participants — producers, suppliers, inventors, machines, or algorithms — are contacted. If an agreement is reached, the transaction is carried out and noted. The impulse to make a match can emerge from each of the four participating sides: from those interested, from those offering, from the product itself, or from the algorithm.

(Glossier stores)

Why phygital experience zones?

Banking becomes air, becomes oxygen

–Yang Qiang, an AI consultant to WeBank and a professor at the Hong Kong University of Science and Technology

The open financial system will not only be about managing the money but about generating, owning, accessing, sharing and transacting everything from data, money to goods. One would ask why do we need a physical space for these interactions if they will happen online or via the use of smartphones. I do believe it is about creating a brand new experience and taking people out of their phone screens for a moment so they can reconnect with their lives and see a bigger picture of what the future transactions can be and what can derive from them and how people situate themselves in the future in regard to their financial/ value-driven selves. They need to forget about what they know about money and stereotypical banking experience. You need to create an exclusive environment, a place they can fully immerse themselves in and build their trust and disconnect for a while in order to connect with an image of a brand and a service provided. The idea for the value-driven financial phygital space would happen next to the digital platform which users would have access to.

Obtaining financial products should become as accessible as tanking your car. They should become shoppable and easily accessible to the public by having many branches around the city so it can reach a large population and having one major HUB where people can access more services. You would need to look twice to make sure it isn’t a mobile phone store.

(Autonomous store Wheelys’ Moby-Mart)


I do think that people’s financial knowledge is drastically low and it is due to the old fashioned system governing the banking system. On the other hand, people are becoming more and more comfortable with online banking and automated services. Where is the sweet spot? People should have seamless access to financial products in one place and then be guided towards choosing the best options in relation to their current situation. That’s why I think if we want to make a change, creating an application itself or another marketing campaign won’t be sufficient. We need to streamline the process in the form of reopening branches under new names, new ideologies corresponding to the current technical developments and people’s mindsets. How the personalization should be defined in a new financial experience space?

(Daylab concept store with my iterations)

  • It should help people with their goals, attain a lifestyle they would like to have and help them to fit their habits and personality to these goals.
  • The service should define the user’s most preferable channel of communicationIt should help to define the shape of the financial technology and services that they are going to use such as what API’s would fit their profile or what tokens/ assets are available and fit user’s profile.
  • It should also be an experience where they can reevaluate the things they believe in, redefine their deeper needs and values, think about the meaning of money in the perspective of their lives and also what it means for the world we are living in.
  • Provide the right type of incentives either tangible or nan-tangible that customer would value most
  • Integrity. Equal alignment of the sensory experiences across all the touchpoints either digital or physical.
  • It should awaken their senses and when they leave the store they should feel empowered as individuals. They should be coming back to experience it once again.
  • It should allow them to set up their profile either by the digital touchpoints or with the help of the assistance if required.
  • They should receive any type of help in guidance in terms of obtaining information about their profile, checking their status or any type of request
  • They can receive a detail experience showing them how their profile value is behaving over time, the experience should be highly informative not only in its simple formal but also on the subliminal level, it should provide necessary insights and suggestions that will help determine the further journey of the financial user’s profile.
  • They should receive the best offer display about the product the user would be interested in. Just like the iPhone is displayed in the Apple Store it is the most ultimate it can get and it keeps improving

Setup ideas for space:

  • Space that is as friendly as the coffee shop and exciting to explore
  • Space where you feel free to stay longer, focus and work on what matters to you while you are getting accustomed with the brand
  • Instagrammable, Immersive — comparison with flagship stores like Glossier, LA
  • Profile creation cubicles that will let people focus on setting up their profile or enhancing it
  • Specially designated areas that will reflect the characteristics of the user’s profiles and their attitudes towards their finances, data, investment profile, type of assets their hold, saving style etc.
  • Custom profile discovery zone. This space should navigate the user through the mental journey of repurposing one’s financial attitude, also towards the concept of money, refocus on the value-driven lifestyle, retouch the user with the new way fo experiencing the non-monetary economy and allow for self-reflection. Digital touchpoints mixed with physical objects and smart surfaces that navigate the user through the explorative experience of one’s profile. The outcome of thgat experience should be about learning, discovery but also co-creation of someone’s profile.
  • Relax/ work/ learn & advice zone. It would be a zone where people can spend their time however they want. It is meant to be a stopping place while heading to another location in town and receives the advice if they need it.
  • Innovation lab would be strictly about innovating/ creating new technological solutions custom made.
  • The service centre would allow the users to come to discuss any difficulties they might be facing while using the digital platform or phygital.
  • Meeting rooms would serve as a specially designated area where businesses can come and discuss their financial options fitting their business needs. It could allow the teams for creative innovation/ ideation session as the room would correspond to the business profile showing the key information about the business and future options while triggering the sensory centres of each individual. The room would allow for cognitive knowledge absorption and discovery.


Disclaimer: These are the projects that I do independently in my free time out of my passion and they are not connected to any organization and I am not collaborating with the companies mentioned in the article.

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