The great divide
Money isn't emotionless, so why is banking?
So I started to think about this some more, and having been around the banking industry for more years than I’d care to admit to, I’ve come up with a hypothesis.
In the days when branches were king, banks used to be a personal service – you’d know your local branch manager and they’d know you, by name. Banks were seen as an integral part of the local community. These were the good old days.
So what happened? Banks started to realise they could be more efficient and efficiency meant higher profit. First off we centralised our back office tasks, taking them out of the branches and creating regional processing centres. Then we looked around at what else would help increase profitability and phone calls were next. Call centres emerged and “offshoring” became the new trend in driving efficiency.
The efficiency police were on a roll. We realised customers could self-serve and banks of machines appeared in our branch lobbies to automate routine transactions. In many branches the first thing you’d see as you walked in was a row of machines – in essence saying “don’t bother us if you can do it yourself”. Not the most friendly of welcomes to your local branch!
And finally the internet arrived. The answer to our dreams, customers really could ‘do-it-yourself’ now; and Internet Banking was born.
I’m not saying any of these things in isolation were the wrong thing to do, but hindsight is a wonderful thing! When you take a step back though you can see that the banks, over the years, have taught customers to distance themselves; we ‘educated’ our customers to disengage.
The result was dramatic – customer satisfaction dropped away, differentiation in the industry eroded, financial products became increasingly commoditised, with price taking more prominence in driving consumer decisions. Why then, when we hear phrases like ‘rate-tarts’, ‘all banks are the same’ and ‘customer lethargy’, are we surprised?
The industry knows this and, boosted by the turmoil of the financial crisis, started to try and turn this around. We now have a plethora of brand/marketing campaigns telling customers the banks are on their side, fair, personal, helpful, a true partner for life. The problem is you can’t just tell customers, you have to prove it!
But let’s go back to digital and the fact that banks’ online services were born out of a desire to cut costs. The legacy digital experiences banks built were designed for efficiency and function. Not a bad thing per se as customers want ease and simplicity, but we de-personalised our banks along the way. We forgot that although we want the ease of banking online, at the end of the day we’re creatures of emotion, not logic. The majority of decisions we make are based on our emotional instincts. Consumers want to buy from brands that appeal to their beliefs, ideals or values (in fact, 63% stated in a recent GfK survey that they’d only buy from brands who had a shared belief system).
Digital is now a highly relevant and essential part of our lives and so the job we need to do is reconnect the emotional divide between money and banks. Technology can help us do this – biometrics, personalisation, real-time and predictive analytics, wearables, social media and multi-screen interactions are all part of our expanding digital ecosystem. They all give us the opportunity to connect in a meaningful way and be relevant to customer lives.
This is happening at pace in other industries and banking is no exception; in fact the emotional relationship we have with money means the opportunity is there to take, which is the plan here at Atom.