In 2010/2011the UK will see at least 3 new high street banks. Metro Bank has already opened, Virgin Bank and most interestingly of all Tesco Bank should be along soon. It is the Tesco bank that I am most looking forward to as I am fascinated by what they come to market with. They really are in a very unique position to offer something completely new in the banking sector. From an innovation point of view I crave new things especially ones that have the opportunity to move existing markets forward. They have a very powerful quad play in their armory. One..Tesco need no branches as they already all over the country. Two…they have one of the best loyalty schemes in the world (Tesco Clubcard), as well as being a great incentive to stay loyal to Tesco for groceries (and everything else they sell) it is also one of the great CRM data sources of our times. Three…They already have some advanced online services e.g. online grocery shopping and physical delivery. They have also embraced open APIs so hopefully this will lead to a wonderful new online banking experience, Four…They sell mobile devices and they sell THAT mobile device, which not only gives them a great sale incentive (Like a free iPhone with your bank account Sir?) it should also focus their mind on really delivering on the mobile front.
Thinking into the future a little bit (lets very optimistically say January 2013) lets imagine a little Tesco Customer scenario. Lets call this mythical Tesco customer Barbara. First thing in the morning Barbara peruses her Tesco Bank account details on her Tesco freebie iPhone (Free when Barbara swapped her account, credit cards and mortgage to Tesco bank). Barbara’s Tesco app has alerted her saying it is shopping day (based on when she usually does her shopping according to Clubcard) and that she is £75 inside her monthly shopping budget on this time last month. Babs (we know her well enough by this point to abbreviate things) takes a look through her overall shopping totals for the month (lovely aggregation feature that one) and drills down into the detail of that shopping to see an aggregated view of the products she has bought that month (from Tesco of course). As she looks through the lists of items she has bought she can also see how many clubcard points she has accrued from each item. A lovely highlighted number in the corner shows new offers are available. A quick press and Babs can access this weeks clubcard offers and 2 for 1s that her local store has on offer. It also highlights offers against her usual shopping purchases and how much she will save this week along with how many clubcard points she could make. Babs transfers into the shopping section (or another app?) and updates her weekly shopping list with a few extra items including some of this weeks special offers and some replacement items for those out of stock in store (the app told her that as it knows Babs local store). Babs marks the shopping list complete and the app pushes the shopping list over to her husband Geoff so he can collect the shopping on his way home from work (he works nearer and finishes earlier than Babs).
Geoff receives a push notification that the shopping list is ready. As Geoff reaches the store he receives notification of some extra offers on in store targeted especially to him (some fine ales on 3 for 2 and a cracking offer on some Camembert). Geoff scans the items in as he shops (the trolley has a lovely iPhone holder to make this easier) RFID tag details are picked up by the phone when Geoff holds the items next to the phone before they are placed in the trolley (the trolley is a series of reusable bags, that Geoff brought with him, held on hooks). He gets a little notification when the list has been completed (including his beer and cheese purchases). On his way Geoff sees a poster for a 32″ 3D Super HD TV for just £299 but the offer is out of stock at the moment so Geoff taps his phone against the poster and the item is added to his bill and will be delivered from Tesco Direct at a time slot of his convenience. He chooses 18:40 on Thursday.
Geoff heads to the checkout where he walks straight through tapping the Tesco iPhone on a scanner, Geoff had previously selected the Pay via Tesco option which means the shopping to be paid for via the online authorisation Tesco have built, this interfaces directly to the Tesco bank account via the internet (therefore skipping those pesky charge inducing card networks). Geoff waits patiently for a millisecond while the transaction is completed and his receipt is uploaded into his Tesco iPhone App (So he has a guarantee for his new Telly), all the purchase details are uploaded against his account online and his new clubcard points are also added to his loyalty offset mortgage (100 points equals £11 off the mortgage). While this takes place the checkout area scans his trolley to ensure the contents match the list passed by the phone. This transaction is complete and Geoff heads to the car to load up the already bagged shopping and head home to get the dinner on. As he leaves the car park his fuel warning light comes on and this triggers an event on his phone to check the location and prices of the nearest fuel station. Unsurprisingly Tesco is the cheapest because as a customer of theirs he gets 5p off a litre and 10 clubcard points per litre.
There you have one of my visions of the Tesco bank future. Exciting from a banking/retailing/innovation point of view yet also a bit worrying from the point of view of smaller retailers.