The opportunities in this vision are absolutely endless - and exciting!
While existing banks have a window of opportunity to lead in this, they will need to move faster if they want to stay at the forefront of this amazing opportunity.
The use of customer data
The first and foremost is data. One of the most significant recent regulatory trends in financial services is around the use (and abuse) of customer data. The good news is banks remain trusted institutions for protecting and securing customer data. This means that they have an opportunity to play a critical role in facilitating this future vision, as data custodians, applying advanced analytics to give advice which is demonstrably in customers’ interests. The bad news is that while banks are robust at safeguarding their data, they have been much slower in manipulating, analyzing and leveraging the data for the customers' benefit.
Another challenge for the banks is innovation. Banks have been isolated for a long time. Operating in a broader ecosystem with agile technology development is certainly not their core strength. The consumer banks' leadership team needs to deal with the dual challenge of reducing costs in the 'traditional' bank and investing heavily in the 'new world' ecosystem.
How banks can continue to demonstrate value to their customers
The emerging platforms show that improving customers’ financial well-being is broader than the world of finance. It means having a deep understanding of their customers; knowing them better than they know themselves and supporting them not just through their major 'financial' moments, but in many key moments where a decision or transaction is made.
To do this successfully means providing an outstanding experience, where ‘good’ financial behaviors are suggested without people having to engage in a lengthy and painful process with their financial institution. Improving people’s financial well-being driven by their personal preferences and ethics should be at the heart of this vision. This provides an opportunity to Build a Better Working World when almost three-quarters of customers say they do not have a firm grasp of financial products and financial choices they are making.
Summary
Existing banks need to move fast if they want to stay at the forefront of this amazing opportunity and continue to demonstrate value to their customers.
