Home Banking Experience-driven banking: experience owners – FinTech Futures

Experience-driven banking: experience owners – FinTech Futures


Experience owners are the customers for experience enablers, which I had covered in my previous post. Of course, a bank can be both an experience enabler and experience owner. An experience owner need not necessarily be a bank though, and, in fact, we have already seen a huge growth of non-bank experience owners.

Experience owners seek to fulfil end-to-end customer journeys for their niche segment

So, what is an experience owner? The experience owner targets a niche customer segment and specialises in serving that segment fully.

Today, banks only serve the “banking” part of an experience. For example, if you are a landlord, your bank typically provides you with banking products and services only, and then for every other aspect of your business you’d find the appropriate support (a property listing provider, maintenance and repairs specialist, and so on).

Experience owners seek to fulfil end-to-end customer journeys for these focused segments. For example, Hammock provides banking, rent collection, and help with tax returns for landlords. Landlords also have the choice to aggregate existing accounts using open banking or open their own Hammock account. This new account is then seamlessly integrated into their existing services, making it better and specific for the needs of the landlord. In the UK, this niche is not so small – over 2.5 million landlords manage over 4.5 million million properties in the UK. Of these, 70% are deemed “amateur” landlords, who generally could do with all the help they can get.

However, as I have said before, an experience owner needs not provide banking themselves or, in fact, any products of their own. They simply can be an aggregator of products and services. Take look at FirstHomeCoach, for instance. Its target segment is first-time buyers. In 2020, it helped 116,843 customers (164,800 in 2019), but these are net new customers each year.

FirstHomeCoach wants to own the home buying experience for first-time buyers and, as such, it recognises that this audience needs more advice and guidance than an experienced buyer. The site manages all their journeys – from saving up to buy a property, to buying and moving. It helps buyers understand what each journey is and aggregates products and services to fulfil the whole journey. Of course, buyers can do this themselves, but this would take a lot more effort.

There are three core competencies for experience owners:

  • Orchestration/aggregation – managing end to end journeys;
  • Engagement – regular customer interaction;
  • Personalisation – driven by deep insights specific to that niche.

Orchestration and aggregation go hand in hand as managing an entire journey (orchestration) will likely involve third parties (aggregation). With aggregation, an experience owner needs to focus on reducing friction and hence should not just provide a set of links to third parties.

One of the big advantages to owning experiences is increased customer engagement. By owning end-to-end journeys, customers must come back to experience owners more often. In addition to this, experience owners will have better insights and data to feedback to customers and drive further engagement. Better engagement means higher loyalty and lower spend on advertising, a huge advantage on low engagement business models.

By targeting a specific customer niche, personalisation is inherent in the proposition. This does not mean further subsegments can’t be identified. For example, in the case of landlords, there are those who own just a single property, those who are overseas investors, homes with multiple occupancy (HMO) owners, and so on. Beyond these, data that is specific to journeys and customers can drive personalisation to a segment of one. The key advantage for experience owners is the deep focus on their given market, which allows them to target analytics with much greater precision and depth. For example, Hammock could provide guidance to help landlords improve their profitability and buying decision because they have a strong base of comparables.

Experience owners have significant advantages to provide targeted embedded banking experiences that are truly differentiated. The challenge for them is to ensure they provide true value to their target segment whilst being able to monetise journeys through their own products and third-party referral fees.

Another challenge could be that the niche does not offer enough opportunity, however, I would argue that depending on the proposition there is the opportunity for geographic expansion, horizontal expansion into closely related markets and vertical expansion into broader and deeper journeys within the niche.

What is clear is that there are significant opportunities for both experience enablers and owners. The impact for end-customers will be increased “multi-banking” as they adopt multiple experience owners, but that is not too different from today and especially for those that shoebox their financial affairs. I’m just saying that we are starting to see banking shift from transactions and products towards experiences – and this shift will benefit customers (increased convenience and value) than banking alone.

About the author

Dharmesh Mistry has been in banking for 30 years and has been at the forefront of banking technology and innovation. From the very first internet and mobile banking apps to artificial intelligence (AI) and virtual reality (VR).

He has been on both sides of the fence and he’s not afraid to share his opinions.

He is CEO of AskHomey, which focuses on the experience for households, and an investor and mentor in proptech and fintech.

Follow Dharmesh on Twitter @dharmeshmistry and LinkedIn.

Read all his “I’m just saying” musings here.