So many CEO’s that I meet around the region confess with a smile on their faces that ‘Mobile Banking is the Way Forward’. That, if you like, this is a dream ticket. Once the infrastructure is in place, overheads are low, customers can manage their own transactions and profits will jump again... does this seem too good to be true? We only have to turn to one of the greatest investors of our time Warren Buffet, to learn that ‘if it seems to good to be true, then it is too good to be true’. I believe mobile banking falls firmly into this category. Unless banks turn the world of banking on its head and think like retailers, they will be burnt.
A few months ago, I was in a presentation given by a friend and colleague of mine, Mark Howman, an incredible mind, with a wealth of knowledge - a genius. What he said and showed is something that I have been unable to get out of my mind. ‘It is simple’ he said, ‘let me introduce you to the customers of the future’. He then played a video which showed young people speaking about their thoughts on the future - with particular reference to the relationships they will have with their bank. It is one of the most brilliant pieces of social commentary I have seen in ages, and one that made every banker in the room quake in his boots.
Sitting there, watching the video, it occurred to me that we, as consultants, have an obligation to tell our clients about how the world around them has changed - it is not changing - it has already changed. With technology, comes an entirely different relationship between retailers and customers. One where there is no loyalty, one where customers are only one click away from a better deal or promotion, a scary world, where the old rules do not apply. One where customers look to other customers for their opinion on a product or service, where if a company does not make good on its promises, it is destroyed - not over a period of time, but overnight.
With so many banks heading toward a mobile offer, how will banks win? I have seen examples, both good and bad examples of how banks are approaching mobile. In Kenya for example @EquityBank have a mobile banking offer. Their approach is to also control the supply chain too and invest in a mobile network - effectively controlling their customers mobile world. In India, @HDFC_Bank have just launched a mobile banking solution that promises a simple user interface and easy access to your money. We have seen @RAKBank launch a mobile banking offer, along with many other banks in UAE. @CBD are banking on @Facebook as a banking platform for their customers.
Now don’t get me wrong, all of these banks are heading in an interesting direction, but have they really considered their offer from a customer perspective? Place yourself in the mind of the customer for a moment and fast forward five years. Mobile apps will be the norm, convenience will be the norm. Using your smart phone for banking will be the norm. But, stop for a moment... how many apps do you have on your phone? There is no limit. So what is stopping your customer having apps from all of the banks on their phone? What is keeping him or her loyal to you? In the current scenario, nothing.
What can banks do about this? They have to think differently, get out of the old mindset and think about creating sticky relationships with customers. Think, what can I give my customer that makes their life easy, beyond the boring transactional stuff I currently offer. What on earth can I do with my branches to make them work harder for me - even, shock horror, are my branches in the right place! Today, branches are either packed with people enjoying free air conditioning and coffee, or they are empty - this is the reality.
I believe we need to look at other sectors to understand what success looks like. Take the online world. Some would say, ‘why on earth do Amazon need a bricks and mortar presence?’, ‘Why are You Tube building studios for aspiring film makers to use for free?’, ‘Why do Apple have shops?’ Surely, each of these businesses are in the near perfect position of generating staggering wealth without the need for bricks and mortar? They have no reason to build anything ‘real’... but, why are they?
Again, the answer is simple, they realise that it is nearly impossible to build ‘real’ relationships with customers without some form of ‘real’ experience. Something tangible that leaps from the virtual world to the real world. By creating experiences that are seamless, in other words, where the virtual world experience is amplified by the real world experience and vice-versa, these business are building trust and loyalty with their customer base.
Banks have the same challenge in reverse. Transforming the digital experience to a point where it enhances the ‘real’ world experience is one tool that will surely build loyalty. Moving from transactional, to a service based culture where loyalty is won through meaningful, personal relationships through all channels is the answer. I am yet to see a bank doing this really well in the region, although I am willing to stand corrected.
Please bank CEO’s if you are reading this, I implore you, build meaningful and personal relationships with your customers, reward them with more than Airmiles and a few points when they use your credit card. Get smart, realise the world has changed and create beautiful experiences that bind your customers to you - before you loose them.