In the past two weeks, I have been in Saudi Arabia, Qatar and UAE. In Saudi Arabia, the market is in transition, we are seeing smaller banks like Al Inma (@ مصرف الانماء, alinma_en), capturing market share from the big boys. They are being smart about their offer, employing great people and are delivering a fresh new approach focussed on customer convenience. In Qatar I am seeing the same, where banks like the fabulous Ahli Bank have re-branded, re-focussed, have a great management team and are hunting the big boys down. The same is happening across the region. ‘Digital’ is leveling the playing field.
It therefore surprised me when I had a meeting with one of the largest banks in the region and I was told by them that the smaller players are insignificant. Sadly, I believe it is this kind of over confidence that will lead to larger banks loosing their market leading advantage.
The concept is simple, in a digital world, size - in the old fashioned bricks and mortar sense - is not so important. In a digital world, a small retail bank can be perceived to be as big as an international player - and they are.
So I come back to my friend at one of the largest banks in the region. When he told me his point of view, I laughed - and probably offended him. Then, I went on to explain my thinking. This is what I told him:
‘In the future - I don’t mean 2020, I mean 2015 - every bank will have a digital presence, an app, a web site, social media or suchlike through which they will encourage customers to take control of their own finances. Let’s imagine for a minute that every bank has a similar app, with similar functionality - transfer money, pay your bills, check your balance etc... what is the difference from a customer point of view?... there is no difference’.
My friend countered ‘Yes he said, but we have air-miles - our customers earn them the more they spend... and lounge access at the airport’... again, I giggled (by this point, I knew I was upsetting him).
‘Airmiles are nice, but everyone offers them in one form or other’ , I told him, ‘and lounge access - who really cares about that?’
He still didn’t get my point, and it was this, that in a digital world, everyone starts same, it is brand, trust, product, service and most importantly the experience that truly differentiates a winner from a looser - size doesn’t matter.
... the new hunting ground for banks is digital and the smaller banks and service providers are seeing this as a perfect opportunity to nibble away at the big boys. Now in themselves, these individual players may not have the power to ‘kill the shark’, but if many hunt like piranha, the sharks had better watch out. Smaller organisations move faster, they innovate quickly, they are nimble, pro-active and fresh. In the digital world, this is what customers want.
So what tips can I give aggressive smaller banks looking to grow:
Create compelling, meaningful and personal customer experiences in digital, regardless of the size of your bank this will help you to grow
Combine digital experiences with beautiful and complimentary bricks and mortar experiences and vice-versa
Offer the ubiquitous services customers expect in digital - air-miles, bill payments, transfers etc... but also offer something personal and meaningful to you and your customer - have a personality and let it shine through
Evolve your offer by being creative. Remember that customers get bored quickly. It is not enough to live off one great idea, digital is a living breathing beast that needs to be fed and it’s food is creativity
Innovate personally by offering experiences that are relevant to individuals and not the ‘segment’
Keep it simple - avoid dancing bears (see my article ‘Beware of the Dancing Bear’)
... and what tips can I give bigger banks:
Never underestimate the smaller banks, if they hunt in packs like piranha, they can, and will kill you
Act like a small bank and do all of the above