By : Robert Johnston
October 02, 2014 08:10 AM
Banks are not always at the forefront of innovation. A tangle of sprawling legacy systems, heaps of regulation that keeps on changing and pure inertia holds back progress. Why invest lots in changes when customers will always need a bank? "If it ain’t broke...."
But banks need to respond to changing consumer behavior, habits and expectations just as much as the next business. Alternative financial providers keep appearing to challenge the status quo. They offer peer-to-peer payments for free, super easy ways to transact online, even an alternative to the very cash we use in the form of crypto currencies like Bitcoin.
The banking industry could learn a lot from retail in this regard.
Manish Jain, industry principal at Infosys, suggests banks need to embrace “the concept of instant satisfaction,” which can be boiled down to “here, now, any time, any place.” It’s something most consumers and shoppers are used to.
Writing for International Banker, he argues against purely ‘selling,’ with all its negative connotation. Instead banks should focus, just as retailers do, on “enabling buying using a real and integrated multi-channel strategy.”
How do you begin to approach things in this way? Co-creating products and services with consumers is one way for sure. We’ve seen some banks go down the route of open API for their mobile applications to let third-party developers create apps that customers actually want, rather than what the bank has told them they need. This is a good example of how choice is so important in banking just as it is in retail.
In its Retail Banking 2020 report, PwC suggests banks are already learning and within the next half decade the industry will mirror the retail market.
“Banks will organize themselves around customers instead of products or channels,” the consultancy firm says. “They will offer a seamless customer experience, integrating sales and service across all channels. They will develop the ability to view customers as a ‘segment of one,’ recognizing their uniqueness, and tailoring their offerings so that customers view banks as ‘meeting their needs’ not ‘pushing products’.”
Optimistic words, but we are beginning to see the change. As part of this, technology will be vital for banks to remove the silos and integrate their systems across channels to deliver on that “here, now, any time, any place” promise.
Learn more about NCR Financial solutions.