Is banking at a turning point?
As traditional banks consider their role and focus in the midst of continual change and fintech businesses continue building trust and brand equity with an app savvy generation, it is more critical than ever that banks understand the crucial difference between ‘doing banking’ and ‘going banking’ and are able to deliver a customer experience to match.
01. ‘Going’ banking is different to ‘doing’ banking.
In banking, the tension between high street and hi-tech has never been more profound. As branch visits decline and trust in banking by app and mobile continues to grow, banks have to take some fundamental decisions if they are to protect the value they’ve built in their brand and their customer base. The challenge for banks, as retailers, is to see and respond to the difference between ‘going’ and ‘doing’ – in the context of their operations and purpose, and in meeting the needs of customers. ‘Going’ is about a commitment of time to an experience because it will give you something back, where a brand is built by connection. ‘Doing’ is the action-oriented, app-centric, convenience driven world of interactions, where a brand is built by functionality and utility. They are two quite different things, but banks need to be able to deliver against both in the context of new customer expectations. As required interaction with branches evolves, banks have to acknowledge the difference between going and doing, and act accordingly.
Helping people do what they need to do, where it’s best for them to do it will not only build a stronger more dynamic customer relationship, but it will determine how branches are re-oriented and put the customer back at the heart of the relationship.
02. Banks need purpose to differentiate.
Banks now operate in a market where differentiation is nuanced. So when rates and product offerings are so similar, banks have to work especially hard to stay relevant; Simon Clough, Global Director at Clear, put it very simply back in 2012 when he said they had to ‘differentiate or die’. More than ever, the major banks are seen as being cut from the same cloth, saying and doing things in roughly the same way, offered at roughly the same cost with the functions they provide for customers near identical in their fabric. The opportunity is for banks to embed brand values and purpose and demonstrate them through action, so that behaviours (and the thousands of people that deliver them day to day) become the true and most meaningful and memorable differentiators. After the banking scandal of 2005, many banks set about embedding a set of values that determined not only how they engaged with customers but – crucially – how they measured the actions of, and rewarded, their people. By behaving against these new values, these banks emerged from the crisis with a renewed sense of purpose and were able to better define what they do to make a positive impact.
Setting a purpose and building experiences that demonstrates this differentiation is critical irrespective of the channel of delivery.
03. Banks just aren’t what they used to be.
The majority of financial institutions can be broken down into a set of offers and interactions; they are no longer necessarily one entity that delivers everything through a single digital or physical portal but a provider of a family of mono-branded action-oriented products. But how often do banks consider each individual element’s desirability and effectiveness and how each might exist and survive as a standalone? Today, time poor, tech savvypeople regard their financial landscape differently. They are rarely prepared to ‘go’ anywhere to sit, and wait. They ‘do’. They are action focused, empowered by technology. We’re approaching a moment where people see financial institutions as a series of applications, assessing products in terms of effectiveness, efficiency, user-centricity and not particularly requiring that they all come from the same provider. A re-statement of the purpose of branches (and the role of the people that work in them) is critical, and a particle level assessment of moments of financial need will mean products are developed around customer need not technical opportunism.
Each element of a bank’s product set has to make sense in the digital domain – separately and together. Thinking like a developer might just be the way forward.
04. Build your purpose. Empower your people.
There is no escaping the fact that without a unifying purpose, organisations large and small have simply no focal point against which to develop products and services or direct their people toward a common goal. Purpose gives people permission to do things in certain ways and be clear about the things that no longer matter. Purpose helps edit as well as improve. Today, purpose in the context of banks is absolutely crucial. Purpose takes the overall intent of an institution (including fintechs and bricks and mortar banks) and helps guide how purpose comes to life through every experience they create. All the fast-moving technology, developer huddles and code crunching in the world can’t replace what it means to be driven by a purpose, towards a clear and differentiated benefit for the consumer.
Building a purpose is one thing. Living it in every single experience you deliver is another, whether it’s in-branch or in-hand.
05. From intent to impact.
Experiences are crucial to brand building across the financial services sector, and helping people manage the ripple effect of financial transactions – to create greater visibility of their total financial landscape – is a new requirement in a more promiscuous era. So, it is no longer enough just to help people do ‘the doing’; financial organisations need to be transparent, helpful and smart about the outcomes. This ripple effect covers different institutions, so providers have to think more broadly than just their own role in the life of a customer. If people borrow and pay back on time, how can this impact their future rates? If people are drawing down from their bank account and using money for certain things on a regular basis, how can the service adapt or respond to it to make money management smarter? Shouldn’t financial behaviour outside banking help influence the development of products, the utility of services, or the cost of borrowing?
Being unselfish about the place a bank occupies in a consumer’s financial landscape might actually increase opportunity.
06. Make life admin easy.
Mr Micawber’s advice to David Copperfield with regards money management might still be true in essence, but life is a little less straightforward these days and the balancing of the books is no longer a monthly or weekly task. People are managing their lives from a single device and able to check their financial status more frequently than ever. So whether it’s pay, rent, invoicing, cinema tickets or utility bills, it’s not that any of these is more important than another – it’s just that everything can be done, from one device, anywhere at all. So the place where life-admin gets done is no longer formal (it’s mainly the sofa), nor is the time the admin is done. The root of the financial actions may not have changed but banks need to understand their place within everyday life and that everyday devices are at the centre of people’s lives.
It’s about banks being ready to be brilliant in the moments when people need really them to be.
07. Give back with big data.
CGI’s 2014 report ‘Understanding Financial Consumers in the Digital Era’ made some very useful, pragmatic recommendations. One finding in particular stands out – the expectations of what ‘big data’ can and should provide in the context of a financial relationship. It’s implicit that the ripple effect of our activity, via our device or channel of choice, is a matter of record. So, because our activity is measurable, it should also result in reciprocal rewards for loyalty, for products holdings, for the value of our transactions and for the channel we choose to use (and the cost savings this returns to providers). More importantly, rewards should be dynamic and determined as close to real time as its possible to deliver.
Now big data is here, it should be exploited in ways that are intelligent, and useful for the consumer.
Just like retailers must start thinking of themselves more as technology businesses as opposed to places that simply stock-andsell, banks must begin acting more like places that people want to visit, not just need to visit whether that visit takes place by app, by browser or by branch. Banking that moves at life speed is what customers expect and banks need to provide, not just via technology but through the people that deliver the services and who live a brand’s purpose through action every day.
There’s a huge difference between ‘going’ banking and ‘doing’ banking. To ‘go’ banking is to invest time in something customers believe will give them something back, whether they’re heading for today’s branch or tomorrow’s re-invented space for finance. To ‘do’ banking is about functional delivery across a personal financial landscape through smart UX, connectivity between providers with no ties to place or people. So how will the fast rising fintechs build trust and value in their brands without tangibility, and how will bricks and mortar banks halt the decline in branch visits by transforming what physical banking should offer? In truth, it’s about being brilliant whether people are going or doing, being unselfishly connected to the competition and finding ways to take big data and make it pay back. Demonstrating an understanding of the difference between ‘going’ and ‘doing’ is a start, but future growth also relies on having a clear sense of purpose to drive the physical embodiment of a brand, the behaviour of its technology and the conduct of its people. Without purpose, how can anyone truly define the future customer experience, and without that definition, how can anyone be ready for what the future holds.
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