I recently had the pleasure of listening to Chris Skinner, author of Digital Bank, speak during the Financial Services keynote at this year’s Dreamforce conference. He spoke about the shift of the banking and financial services world as one moving from the distribution or exchange of hard currency in a local market to one of moving value in a global market. While this is a concept that seems readily apparent once you hear it, it struck a chord with me a short time later when I received a letter from my bank informing me that my branch was closing. What I found amusing about this letter is that what the bank considered to be ‘my branch’ was where I opened my account back when I was a kid. I’m pretty sure I haven’t been there in at least 15+ years, but the bank is still operating under the notion that I’m tied to that branch. In fact they notified me that my new branch was just a short distance away from my old branch back in the town I grew up in and a location that I will likely never visit. If the bank had really been paying any attention, they would have noticed that I had been conducting most of my in person transactions in the city of Chicago. Using that information they could have perhaps suggested an alternate branch closer to me, assuming they’re intent on tying me to one for some internal purpose. Where I’m going with this is that the bank has shown itself behind the curve in a couple of ways as we head into the new (but not so new) digital age:
- They are still operating as though I am mostly conducting hard currency transactions in a local market and it appears that their operational structure may still operate this way, as they’re likely attributing my account value to a particular branch.
- They are behind the mark from a Customer Experience perspective in that they haven’t made use of the data available to them around my activity and tailored their approach with me appropriately (e.g. recommended a closer branch).
To me, this is a great example of the message Skinner was trying to convey in that banks are still operating in an outdated model. There needs to be fundamental change on the part of banks to align with the new customer expectations around how financial transactions should operate. They need to do a better job of organizing themselves to support the flow of value in a global economy where customers expect access to and transmission of their value anywhere at any time. Along with that comes the need to really know who your customers are and deliver an excellent customer experience. It is this combination of access and excellent customer experience that will define the players that will have the most success in the new global digital model. The financial institutions that get that right will be the ones that customers flock to. That’s because they’ll break down the barriers around how and where customers can transact their value so that it’s on the their terms and doesn’t impede them. Innovations like Bitcoin and cloud computing (i.e. Salesforce.com) are helping to spur some of this transformation in the industry but clearly there is further to go. As they say, change is the only thing that is constant, so financial institutions need to consider adapting soon or risk being left behind… like my old bank branch.