The Bank Channel

Watching banks navigate these pretty volatile times in which customers are questioning pretty much every aspect of their financial setup – who they’re with, what they’re holding, how they time markets and movement in banking – has really revealed their true colors to me.

A benefit of only being in the banking industry for 5 years or so is that I can very clearly see the pattern of change from when I started and to now – and I can tell you in the more traditional banking landscape … not much has changed.

But change is going on all around that landscape, and banks need to focus on this.

Now. Today. This week.

They need to be aware of what is happening to customers, innovators, competitors, and technologies, for these forces will determine their futures, not the other way around.

Here are the obvious signs that I read about and see that show many large, old banks are really unaware or unwilling to whats happening:

1. Your bank’s HQ still in a swanky, marble laden ivory tower in the most expensive street in town – this is deliberately intimidating architectural language designed to engender trust, but really means you have to ask their permission to get your money. Modern new office spaces now concentrate more on quality of light, space and environment, and employee happiness and productivity more than the Georgian era monolithic structures did.
2. Your bank doesn’t realize its role is as a guardian of customers money as opposed to an entity that holds the purse strings in our lives
3. Your bank is launching expensive new ‘flagship’ branches, when the numbers of people visiting branches is in decline. Three new branch refurbishments could probably fund the best online banking offering in your banks local market.
4. Your banks new ‘flagship’ branches are going ahead anyway and look like an Apple store, except not quite as good. (Sorry Citi, but it shows).
5. Your banks branches are laid out in a dumb, functional way, with poor understanding of customer flow or task, then overlaid with various wasted trickery like coffee machines and book stores. But you’re forced to the branch by archaic documentation and identification requirements, when you’d rather have finished that application or process at home online, or on the phone where you started it.
6. Your bank is still considering the business case of social media, when the likes of Facebook and Twitter are replacing alternate communication tools – like speaking to each other face to face, or even sending an email
7. Your bank also bans social media at work, without spending any time to understand how they might leverage it, or at least understand thats how people communicate internally these days (Yammer is awesome!)
8. You bank doesn’t care that much about the usability and effectiveness of intranets or internal tools, despite these being the platforms that power employees to do their work ALL day, EVERY day.
9. Your bank is yet to really understand or embrace mobile, when at the same time in growing numbers every person on every train, bus, lounge room couch, desk and cafe table is peering into their phone screen for hours at a time
10. Your bank still thinks that people who use iPhones, iPads and Android phones are ‘tech-savvy’, when the power of these devices is that they’re ridiculously easy to use, and DON’T need a PHD to use.
11. Your bank’s internet banking experience is still a dumb transaction history list – no insight, no advice, no appropriate cross sell, no getting ahead financially. IB and more so MB will be the main tool people use to understand, manage and grow their wealth.
12. Your bank has dozens of home loan, credit card or other such products, when a handful of simpler more suited products would do just fine and actually resonate far more powerfully with customers (the burden of choice can be overwhelming!)
13. Your bank attempts mass brand campaigns that talk about their connection with you, your heart, your spirit and other such ridiculous claims (only bettered by Telcos – I’m talking about you M1!)
14. Your bank’s mass brand campaigns are also ‘leading’ the corporate culture, rather than ‘reflecting’ it – this is dangerous. What if you can’t (or never will be able to) do what you claim?
15. Your bank ‘knows its customers’ so well, it has a really detailed PPT presentation about them! (The Bank has never ‘met’ these customers though)
16. Your bank doesn’t ask customers what they really need, only what they want. And doesn’t include customers in the creation and implementation of new products and services, holding them close to their chest until launch. This is doomed to failure, or at least consigned to the ‘… meh!’ pile of banking offerings.
17. Your bank has never mapped an experience end to end to see what a customer really goes through – ‘wow it takes 3 weeks for that document to get processed …” – or has never been a customer – stood in a queue, filled a form, navigated a complex IVR menu. Many times, the leaders of these banks have not been in a branch, call centre or customers place of banking for years (who needs to when you have a dedicated Private Banker??)
18. Your bank is willing to outsource what a customer would call its core competency – service – whilst those functions that protect shareholder value – audit, risk – are generally internal and protected. Whats that saying about the fermium model? If your not the customer you’re the product. Perhaps to a bank, customers are their products that they make money from, rather than the other way around.
19. Your bank thinks design is how things look not how things work
20. Your bank thinks usability isn’t important than face to face service, when probably three quarters of a banking ‘relationship’ is spent dealing with documents, forms, statements, fact sheets, websites, apps, queue ticket machines, interfaces
21. Your bank still bends you over a barrel with complicated, jargon filled terms and conditions documents, snaring you for fees, charges, sneaky up selling and other tricks – people are tiring of this so quickly
22. Your bank thinks customers want ALL the functionality when really they only want the core functions, and the rest can hide somewhere else for a while (until I want it , now!)
23. Your bank doesn’t think a call centre is more important than branches, despite the volume of interactions and their critical customer experience. Call centers matter, hugely. And will be an increasingly important channel IMHO.
24. Your bank carefully watches the direct competitors for new ideas, launches, products, services etc, when customers think banks are all the same, and desperately hopes Apple, Google or Amazon would open a bank one day to sort it all out. If Richard Branson can’t crack it, then maybe the ghost of Steve Jobs can.
25. Your bank doesn’t need consultants or outsiders, because your bank knows best. That lacks courage and humility to me.
26. Your bank makes it hard to switch to or from the bank – the idea of ‘stickiness’ in offering and service reeks of artificial ways to make it hard for a customer to leave the bank. This is only annoying and frustrating, not subtle to the customer or endearing to the bank.
27. Your bank reveals its true motivations at annual shareholder meetings, without really mentioning customers. But back at the office, the bank is all ‘customer-centric’ again
28. KPI’s and incentives are still tied solely to revenue, rather than a mix of business and customer success or satisfaction (these are often polar opposites in objective and difficult to balance!). In the one moment the boss creates a culture of focused customer service, then in the next bangs the desk demanding the team makes its revenue targets for the month/quarter/year – how does a team does this at a frontline level constantly across a diverse team and long time period?
29. Your bank insensitively gives out ‘market rate’ bonuses to high level execs, as if the term PR didn’t exist or wasn’t important
30. Your bank fails, gets bailed out by governments and tax payers, then makes the same mistakes again, or spends the bailout on the previous point instead of improving customer service, experience and the value proposition
31. Your bank uses the term ‘this is the way we’ve always done it’ to justify a million pretty stupid decisions

Has any bank cracked all this? No. And I’m not saying every bank sucks. Many banks have cracked many of these items, and done it well through for example product and policy (NAB and its Fair Pricing and Banking), customer experience improvements and functions (DBS, Standard Chartered, and my employer OCBC – I’m biased, because the bank I work for is increasingly getting ‘it’ and are doing good things – I’m sure there are more, please share!) and great channel ideas and executions (CBA, ANZ, most of the Kiwis and Spanish banks, Umpqua etc). What I’m saying is every bank has the potential to be something truly great to its customers (I wouldn’t expect customers to love my bank, just like them), all it takes is the conscious effort to do so.

Does a bank need to do ALL the above? No.But some or most would be good before its too late and disintermediation takes over. The economic crisis I believe has, in a surprising way, lead banks to a sense of security – in times of economic uncertainty there is a flight to quality – deposits into the big banks. Once this uncertainty is over and the global economy is moving again, watch for alternate banking brands and models like Simple, Movenbank, UBank, FRANK, etc to really vault forward, at least in short term experimentation and adoption.

Has any ‘non-bank’ player got all this? No way. I’m amazed for example that no one, no one at all, has really cracked the aggregated PFM space. I don’t know why that’s so hard. But many non-banks may be better positioned to create a new offering that meets all these frustrations above.

What other signs are there?