Banking and Social Reimagined

I noted in the section of my website titled "Banks are failing at being Social" that banks are relying on the physical branch to bring social interaction to their clients.  By making clients come into branches for human social interaction it is no wonder that many publications and institutions are reporting that branch traffic is relatively stable in an online world and that client satisfaction goes up when the client uses the branch.  Let's be careful that this is not a self-fulfilling prophecy, that by making clients come into a branch to interact with a human they can relate to, to which human nature would say that is a positive thing, we're thereby justifying the branch's existence.  Let's be careful that a future competitor, perhaps one that is already in the marketplace today, is going to bring human interaction digitally to the client and produce the same level of client satisfaction as a physical branch visit.

Just how could a digital interaction be on par with a branch interaction?  Something as simple as Skype or FaceTime or perhaps as advanced as Augmented Reality will help move the hand-to-hand combat and social interaction that the bank branch has had a millennia plus hold on into the digital age.  A company called Layer, https://layer.com/, has built a platform that excels at realtime texting with clients.  Plug this into a CRM system like Salesforce and how you have an empowered associate who will have a better chance to empathize with a client in real time gleaming information from CRM and interacting with the client on their terms.  Extend this to video conference or send them a text link to call the associate directly if at any point a voice call is preferred by either party. 

An example Layer provides of being able to address a customer's need in real time via texting. 

What are the consequences of this?  Let's count among them the reduced cost of no longer maintaining a physical location, the reduced labor cost of operating out of central location, and the increased client experience by providing banking on the client's terms mean their location and not your branch's location.

Large Banks are winning with Customer Experience

The largest of the Banks in the United States are winning over the Millennial generation with superior tools and client experiences.  This is the same generation that is turning away from vehicle ownership and suburban homes in favor of vehicle share and Uber in urban environments where walkability is key.  One would think that after the great recession and the public ire that was focused on too-big-to-fail that consumers, including the counter-culture portion of the Millennial generation, would turn to community banks and smaller financial institutions.  However this is the same generation that covets exceptional customer experiences and it is the large financial institutions that have proven to have the wallets and vision needed to execute around such experiences. 

Just look at Chase's account origination statistics broken down by age group.  57% of new accounts were from the Millennial generation.  A group of new clients that will go on to inherit an unprecedented amount of wealth.  Chase is doing this by provide the basics of online account origination, money movement, mobile remote deposit capture and more services wrapped in a client experience that uses well orchestrated mobile and traditional website interfaces along with text messaging and advanced interfaces like Amazon's Alexa or Apple's Siri.  Chase is furthering the experience with purchasing the technology to implement the likes of Chase Pay and Zelle as well as other up-and-coming Apps.  Note that in 2016 Chase invested $9.6 billion on technology of which $600 million was spend on fintech.

In the end customer experience trumps customer service.  So while your smaller financial institution might be able to provide more personable customer service, and you may say that customer service is your competitive advantage, I challenge whether that is true or, if you can convince me it is true, whether it is sustainable.  The questions I leave you with:

• Do you have the financial products and services wrapped into the experience needed to compete? 
• Do you have the organizational culture required to embrace the creation and deployment of products and services and the expertise needed to wrap those products and services with at least an adequate customer experience if not superior customer experience?
• Can you maximize your limited resources to provide a great experience and then brand yourself in such a way as to win "fans" and loyalty?

Let me help evolve your financial institution! Whether in technology leadership, product leadership, operations leaders or more.  Lean how my years of leadership and experience sitting at the intersection of business and technology can help your financial services company compete.  Click here to learn more about my background.

Amazon is building a store! Bank branches must be here to stay

To paraphrase a recent statement from a financial services CEO, "Amazon is opening a physical store, when the largest Internet retailer is opening a store that only shows the value of the physical location to customers and thus the value of our branch network to clients."  Shortly after that statement was made the Wall Street Journal published this April 21, 2017 headline, "Brick-and-Mortar Store are shuttering at a Record Pace".  The article goes on to note that based on the pace for 2017 "retailers will close more than 8,600 locations this year, which would eclipse the number of closings during the 2008 recession."  And that Amazon store?  That store is attempting to be a technological marvel with no cashiers...which sounds more like a large ATM then a branch.

This is not the beginning of an argument to throw away your significant investment in branches.   Your bank's culture is not ready for that, your leadership is not ready for it, your shareholders are certainly not ready for it.  And let's face it the customers you serve today are likely not ready for that.  But will you win the customers of tomorrow through those branches?

This is a call to action, that to compete and differentiate you cannot imitate your competitors and you cannot just incorporate and use the digital services around you (e.g. "but my bank has a Facebook page and a Twitter account therefore I'm social") to say you're ready for a digital world.  To differentiate yourself you're going to need a strong digital [now here comes the frankly exhausted, overused term of] "customer experience".  The challenge here is to question how it is your clients would like to interact with your bank in a digital world, regardless if the branch is an option today for your clients, this is to at least prepare for the risk that a costly and capital intensive branch network is restricting you from investing in the digital experience that could one day replace the need for a branch, that is one day needed to satisfy the client who learns they really don't need a branch.  

Let me help evolve your financial institution! Whether in technology leadership, product leadership, operations leaders or more.  Lean how my years of leadership and experience sitting at the intersection of business and technology can help your financial services company compete.  Click here to learn more about my background.

Banks are failing at being Social

Humans crave social interaction and while the Internet has brought technology like message boards, instant messaging and now, in the 21st century, the likes of Facebook, Instagram, LinkedIn, Twitter and more, banking has yet to leverage technology to meet this human condition. Bankers tend to think they are being social if their on Facebook or allowing the posting of transactions to social media with the likes of Venmo.  Perhaps one would even think to add message boards and rating of products on the bank's website itself.  Yet this is not the social aspect of banking and that the support of social in banking has been, and largely continues to be, restricted to the branch.  So the latest aspect of social interaction in banking began nearly a millennium ago and while it has incorporated technology it has generally not evolved.

Let me help evolve your financial institution! Whether in technology leadership, product leadership, operations leaders or more.  Lean how my years of leadership and experience sitting at the intersection of business and technology can help your financial services company compete.  Click here to learn more about my background.