What this Means for the Banking Industry and the World at Large
Last week I discovered the San Francisco startup, Eatsa. As I am generally trying to eat healthier these days, so I decided to challenge myself to eat the healthy quinoa creations at Eatsa for every breakfast this week. Eatsa is modeled after the “automats” of the 1950’s and 60’s but with a healthy and decidedly 2016 technology twist.
You order from a mobile app or an iPad-like tablet and minutes later your food is available in a cubby complete with a clear glass LCD door that has your name on it.
For breakfast, I ordered the quinoa yogurt parfait and the fruit cup. While quinoa & yogurt may take some getting used to, the now familiar ordering process took no time to master and the speed and convenience of picking up a healthy meal between my ferry ride and BART (electric subway train) ride was a breeze. I didn’t miss the human interaction at all here as the choices were straightforward, the process was simple and well explained, and the time saved was significant.
For lunch, our office manager ordered lunch for the office from a website that aggregates many different food providers into a single portal called Cater2.me to allow for speedy and easy ordering of catered lunches. While a human, not a drone dropped off one of the office favorites, Curry Up Now, a now well defined process delivered neat boxes of Indian burritos clearly labeled with what is inside with meat choices not even in the same box as vegetarian choices.
A once tedious process of setting up a lunch for 60 is now a few clicks and a swipe.
For dinner, I finally decided to try Munchery, a subscription food service that has been nagging me with a free coupon for a month or so ever since I discovered that they deliver to the North Bay. I now have their app, they have my details and tonight my wife is having the Cuban-Style Picadillo Bowl and I am having the tri-tip.
Provided that Munchery delivers a quality experience tonight, the price of ordering delivery reduced by 60% provided my wife and I can fire off an order before 2 p.m. on the days when we don’t want to cook. With my data stored, ordering dinner for two is now three clicks. It takes longer to contemplate the choices.
Eatsa is a new twist on a old format and is clearly at the bleeding edge of the second wave of digital automats, but this refreshed approach has caught the attention of McDonalds and other food giants. Ordering from an aggregated caterer site, while still relatively new, has taken hold rapidly and is now the dominant way lunch catering is done in major metro areas. Personal food delivery is still finding its place with seemingly as many companies entering the space as leaving it with the ultimate business model still to emerge. What is true is that once these companies the those that follow them get past technophile early adopters like my wife and I, our expectation of how easy and fast it is to arrange a meal as a country will have forever shifted in the same way Amazon has shifted our view of commerce. It is so easy to get used to fast and easy. Most of us now think the microwave takes too long at 1/10 what it used to take to heat or reheat food. And in any Starbucks you can see virtually everyone waiting for their coffee surfing their smart phones as they wait through the excruciating 2-3 minutes for their coffee.
While perhaps instant gratification is a existential threat to humanity, we nonetheless seem to want to move every process to instantly gratify. Uber, Fitbit, and Google Express are all different takes at this common human desire. A common thread is that ambiguity is removed replaced by certainty and all telemetry that gives us real-time feedback just where we stand and exactly when we’ll be gratified. In this changing world, companies offering very different products and services from these are being held to same standards.
Contrast these offerings with what the experience my wife and I had trying to get a HELOC recently. We like to barbeque and eat outside and our home doesn’t have a yard, so we want to build a deck. With the economy seeming to soften a bit and interest rates quite affordable right now, it seems to be a good time to get relatively cheap money while keeping more cash on hand for any rainy day that might develop. After checking with our bank, which had temporarily suspended offering HELOCs, we decided to go into a bank in our neighborhood. This branch was surprisingly lively with a line of largely customers with substantially more grey hair than me doing various manipulations of their money. Beyond the teller desk was the branch banker area with a couple of desks. It was a ghost town. When the line died down enough, we were able to get a word in edgewise to enquire when the branch banker we had made the appointment with would be available. It turns out he was the teller we were talking to! He hands the complete line over to his colleague and comes sidles up to the ghost town. We refresh with him on the need and he asks a few basic questions. He quickly determines that he doesn’t have the authority to discuss HELOCs with us above a certain low dollar amount that wouldn’t have paid for the railing on the deck. In order to help us, he’ll need to fill out a form and send it in and some one will have to get back to us. …but he can’t find the form. It took what seemed like 10 minutes for him to find and photocopy the form as he went around the branch looking for it and asking his colleague where it was. He then took the freshly copied page and began to ask us every field on the form and as he filled out the blanks by hand. As the questions got more and more personal my wife and I shifted in our seats and looked at each other uncomfortably. In the end, he had extracted essentially our net worth and much to our surprise later, permission to pull our credit report. All we wanted was a rate and an amount we could borrow from him, and we were an hour in and still didn’t have this basic information. We pushed him on this point. He told us that they had a current offer at 3.75% that they held fixed for three years, but it was only available if you had a checking account already. He said that in the branch they had developed a process to get someone into that checking account first and then they could get this rate. Ok, now we were getting somewhere. This is the product we wanted and we told him so. He assured us that someone from San Francisco or Novato would get back to us.
Several days pass and nothing. Finally I get a call from a guy trying to sell me private client services. I assume he is calling about the HELOC and answer his various questions until it becomes clear he is also trying to assess our net worth. I tell him I might be interested in what he is offering, but my main concern is the HELOC and I want to get that sorted first. He says he’ll pass me on to a loan specialist. When she finally calls, I tell her about the offer I heard about in the branch. I also tell here about the rate Citi is offering which is 2.99% fixed for the first year. She says the offer I heard about isn’t available and that they aren’t doing anything to match Citi’s offer. She says I should look at a commercial loan or some temporary loan that I could access where she would then shift us into the next offer. She says she’ll get back to me about the commercial loan.
The next week some guy calls. He wouldn’t say exactly what he wanted beyond needing to verify who I was and that he needed to collect the documents to close my HELOC. I was dumbfounded. We hadn’t even heard a final rate or selected a program. I quickly shut down the call. Weeks go by and the loan officer I spoke to writes me a e-mail that says the commercial loan is not an option for us. A few more weeks go by and she writes us with the bank’s new offer – 1% for six months and then floating. The lock period is far too short, requirements we had already communicated. We pass.
So about 6 weeks start to finish, our net worth has been prodded 10 ways from Sunday, we’ve had many interactions with 4 different people, one of whom was in a position to help us, and we received no offer that made any sense. We are where we started.
There is a place beyond frustration and disbelief that manifests itself as just numbness. It doesn’t have a name, but I think we’ve all been there. Increasingly though, I think we are going to see consumers start to get “mad as hell, and not take it anymore,” (quoting the classic rant movie, Network) especially when they are millennials who grew up with the Amazon one-click order button and Netflix.
My Eatsa breakfast was all digital and took seconds.
All the digital interactions I described today took maybe a total for 2 minutes and they resulted in at least 64 servings to my wife and I and everyone I work with. The bank process I experienced was as far from digital as you could imagine, but my going in expectation was that it would be digital. I imagined someone behind the desk when I arrived who could input some basics about my wife and I into a system. I expected that the bank could glean enough about me quickly to understand that I was a near zero credit risk and come back with some firm offers right then and there. I expected to walk out of the branch with a HELOC, and I was a little perturbed that we had to go in at all. While this bank for this process wasn’t on the path to digital at all, clearly they need to be.
One indelible thing I have learned about human nature is that expectation is the reality that people expect and expectation almost never moves backwards, it only moves forwards. People will naturally gravitate to experiences that better match their expectation and those paying attention to collective expectation can easily sweep the deck ala Uber and Netflix.
As a digital and efficiency enthusiast working at a company that helps banks better understand their customers so they can react to them in real-time, I may be a head of the looming wave of expectation that we impact the financial services industry. I would ask bank executives to ask a former Blockbuster or Yellow Cab executive if it pays to stay ahead of the curve. And if you are already there, can you get me a HELOC?
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