Unless you’re King Midas, money isn’t an end in itself. It’s an enabler. We use it to provide the things we, our families, and our communities need and want so we have an amazing life together.
Banks almost always put themselves in the wrong place in this story. They craft their business model as if the banking transaction is the final step in the customer’s process. It’s not. It’s usually somewhere in the middle. One banker says simply, “The customer is not thinking about buying a mortgage. They are thinking about buying a house.”
What would banks do differently if they had the story straight?
- Place the real customer experience at the top of their mind and wake up every morning trying to improve it. I am NOT talking about having a friendly greeter or a comfy sofa in the branch. The branch, and possibly the bank itself, might be completely invisible in a great customer experience.What do we experience today? One well-known bank took 20 minutes to accept an IRS refund check in deposit and warned us the funds were going to be unavailable for a week. The process left us feeling cheated, despite the comfy sofa.
- Admit that other organizations may be better at designing some of their customers’ experiences, then stand back and let them do it. Google or Apple may do a better job interacting with millennials than banks could ever hope to do. Banks should go ahead and partner with these organization, but get comfortable taking a back seat. Ultimately the customers will need the bank’s compliance structures and trustworthiness for their own peace of mind and they’ll want it “inside” rather than in their face.
- Partner, dare I say, embed themselves with the companies that have what the customer wants. Help the customer specify and then find the car they want without losing sight of what they can afford. Provide secure, instant authentication for purchases, travel, and employer queries without revealing the customer’s private data. The target? A customer who keeps coming back for life.
- Build an open banking platform that facilitates partnerships. Of course security is paramount, but most banks are quite excellent on that front. Here banks can shine by being easy for other organizations to work with. For some, this will be a stretch, and for others downright impossible. The banks that learn how to get along on the playground will be rewarded with growth.
- Find a place in their business model for micro transactions. In addition to wooing the wealthy, banks that find a way to facilitate small, high volume financial flows can end up just as healthy. Peer to peer transactions need the integrity structures banks can provide.
- Recognize depersonalized, formula-driven banking for what it is—a way to facilitate online, self-service, bankerless banking. Automation at its best. But banks shouldn’t conclude that formulaic decision-making can take the place of deep, impactful banking relationships. One successful entrepreneur and community leader recently refinanced his home mortgage completely online. He commented that he wasn’t even asked about his lake house or commercial building or the mortgages on those. A personal banker would never have missed these assets, the entrepreneur’s character and standing in the community, or the opportunity to cultivate a relationship.
- Use the information they already have in their hands to help customers with their financial lives. Let me say it again—to help customers with their financial lives. This is different from trying to grab a larger share of the customer’s wallet. More often than not, banks stand as roadblocks to their customers’ success. They represent hurdles to overcome. Their favorite, risk-aware answer is “no.” Tomorrow’s successful banks will have a different posture. They will keep their customers’ life goals top of mind and work alongside them to help make dreams possible.