What do we want banking to look like in 2020?
Laura Watkins
Executive Producer
David M. Brear, our CEO, recently asked his followers on LinkedIn the following question: What three things should every bank in the world do in the next 3 years to be successful?
So many people responded to David’s post with varying opinions but one thing was clear: change was paramount and digital was the way forward.
What three things should every bank in the world do in the next 3 years to be successful?Not one single person of the 50+ responses said that banks were fine as they are, no changes required. No one said that banks should keep on, keeping on. Every single person had suggestions for change. Most want to improve the banks’ culture, technology and customer service. In essence, what people really want from their banks is for them to be less like a bank, at least in a traditional sense. Let’s take a deeper dive at the most common responses:
Put the customer first
Customer experience should be priority but people are increasingly feeling let down by traditional banks’ customer service and the feeling that they "own" you and your data and therefore treat you accordingly, with the attitude that you need them, not vice versa. With the rise of fintech and challenger banks this is becoming less and less true and people want to feel a greater sense of value from their bank for their custom and loyalty, else banks could find they vote with their feet and take their custom elsewhere. Likewise, people want to see “customer-centric” strategies where customer experience is at the heart of what banks offer and particularly in the digital space; banking UX is often poor and cumbersome and in store customer service isn’t much better with only certain stores offering certain services with large waiting times for appointments. Additionally, people would also like banks to branch out more and offer financial services and a greater range of products, not just traditional banking offerings and services.Digital UX and digitisation is paramount
The general feeling is that banks’ digital services should offer as much, if not more, than in store services, allowing customers the choice of which one to use, not be forced out of necessity into an ever decreasing number of stores for specific services, such as mortgage applications, that aren't available online. Banks needs to go digital and get there fast, it should not just be a cheaper way to run their in store processes but stand alone as a faster, slicker, better alternative that anyone can use, especially the busy, technology savvy customers who don’t have the time to go to a bank branch that’s only open 9-5. The future of banking should allow people to do their banking on their own time, on their own terms, online. Similar to the first point about improved customer experience, people want their digital products to follow the same ethos - for banks to find out what customers want or need and invest their time and development accordingly - with particular focus on APIs, data integration and security. To do this banks need to learn from fintechs and other software providers to go truly digital. As we have always said at 11:FS, digital banking is only 1% finished, banks need to work hard to make up the rest of the 99%, and they need to make bigs leaps into this space in the next three years, else fintechs and challengers will get there first.Build trust and greater reliability
Trust between banks and their customers is enormously important. Much like the customer “centricity” people want to see in banks’ strategies for progress, banks need to be more transparent and open with their customers, from their ethics to their unexpected fees (a prime example someone mentioned was the cost for your bank to “arrange” a mortgage for you) and particularly about what they’re doing with the data that they are entrusted with. Culturally people tend to distrust their bank, especially after global financial crises over the past few decades, and traditional banks need to take steps to win back their customers’ trust - or risk losing them to newer, more open banks, that treat their customers like human beings, not numbers in a generator. Equally, challenger banks and fintechs have access to newer and better technology to greater safeguard consumer data, incumbents are being left behind by their own slowness - they have the money to invest, but changes in traditional banks happen at a glacial pace, whereas the digital space is changing all the time, and incumbents struggle to keep pace. Data protection should be paramount to a bank and fraud prevention should be a huge priority to prevent customers receiving the same old dreaded call from international call centres informing them their cards have been cancelled due to activity that may (or may not) be fraud, they can’t be sure, but just to be “on the safe side”, or indeed receiving hoax calls from companies pretending to be their bank attempting to defraud them. Banks need to clamp down on fraud, and not just do it but communicate clearly that they’re doing it, to reassure their customers and win back their trust.Change banking culture from the top down to behave less like a “traditional bank”
Going hand in hand with embracing digitisation, people would like to see a general cultural shift in how banks organise themselves. Banks need to rearrange themselves from the top down, ensuring that they have the people and structure in place to allow them to move with the cultural and regulation changes in the banking industry to bring about digitisation, and to react quickly, easily and at scale to embrace changes. They need tech-savvy leadership to take them into full digitisation, and be willing to take risks and innovate in order to keep up and get ahead, not just keep up the status quo. Aside from their C-suite leadership personnel, people thought banks also need to change the way they behave. They need “to become a part of their customers’ lives and not just their wallets” - as one commentator put it. Like Google or Amazon, banks need to strive to offer services beyond their original USP that integrates with more of their customers’ lives than traditional banking does currently. They need to become something consumers want to be a part of and are interested in the latest developments, not just stick with because everyone needs a bank and it’s a lot of paperwork to switch. Greater integration or partnership with other products and services - such as peer to peer transfers using messenger apps like Venmo or Zelle - is the way forward; big banks need to embrace this and be willing to innovate or get left behind. Watch this space to see if David's LinkedIn commentators are right; if they are, big banks definitely have their work cut out for them... Thank you to all the contributors to this article via their awesome comments on LinkedIn. For more from David Brear, follow him on Twitter, connect with him on LinkedIn, listen to Fintech Insider, or book him to speak at your event.
