From simply managing money to managing complex relationships, the world of consumer banking successfully made this necessary transition. Yet today, there is need for yet another jump, to fulfil the expectations of new-age customers, belong to the irreversible age-of-experience. Banks now must become Event Managers, shedding their conventional role as high-intensity destinations, instead becoming inspirational and responsible abettors for every journey.
The early inductees in the banking system, modern youth, are focussed totally on identifiable outcomes across categories, valuing brands who help them reach desired destinations. It is true for their careers, their relationships, choice of leisure, travel, wellness and every other experience. Venture Capitalists are valued for their role in bridging ambition and reality, doctors are respected for ensuring continuing fitness, educational institutions are held in high regard for lending credibility to ability, politicians are elected for their role in stable governance and so on. For the less-serious contexts, the connection is even clearer – entertainment brands improve the happiness quotient while travel and leisure add many miles to the repository of actionable memories. The easy adoption of apps provides further evidence for this hypothesis – customers seeking simpler conduits of access to their desired experience, eliminating the traditional trials of transaction.
While innovative digitised banking solutions have emerged successfully, they still operate from a transactional mindset, adhering to rapidly-dissolving Relationship Management principles. Where the basic conversations are still about managing money or providing growth-related advantages and the pushing of portfolio investment opportunities, reputedly more lucrative for bank than the customer. As a result, the first-jobber finds very little difference between the competing offerings, an engagement initiated by default and rarely choice. Equally, for the slightest deficiency, there is a trigger-happy desire to search afresh, the levels of trust between banker and account-holder at a record low, courtesy scams and disenchantment across the board. Digital Banking offerings are focussed largely on convenience, a transactional attribute that quickly loses its newsworthiness. Attempts to offer lifestyle experiences are rooted in discounting and special-offers, instantly compared to the travel portals and credit card players.
Welcome then to Banking 3.0, which permits the liberal usage of imagination, although rooted in truthful insight. Where the retail customer is invited to sign up for an Event Budget – ‘Easy Access’ defining the Savings product, ‘Planned Access’ defining the Fixed Deposit while ‘Future Access’ describing the investment products that are recommended. At the very outset, the necessary events are budgeted for, from rent to electricity to fees to EMIs, while then the indulgence events are factored. The Event Manager assigned to every client will help prioritise and assign the choices, from eating out to holidays to shopping to luxury accessories, while also advising on how much should be allotted for ‘Future Access’ and ‘Planned Access’. Keeping in mind the long-term events connected to children’s education and other life milestones, as well as funds for entrepreneurship or any other requirement. Thus, the entire corpus of available funds will be allotted and managed from an experience perspective, unique to every customer, as opposed to the conventional utilisation perspective, standardised and by insight-less rote.
Banks will thus indulge in open-source alignments with Experience Providers in every category, from necessity to indulgence, offering the customer a wide platform for effective choice. Where the premium will be on the expertise in customisation to life-stage and desires, not merely discounting or package experiences as per current norms. Event teams, staffed by experts across industries, will continually upgrade and refresh the possibilities, being flexible and adaptable as per the evolution in customer profiles. Technology will play a critical role in this, not just in digital banking transactions, as automated algorithms constantly strive to update the customer about latest possibilities, not requiring a human interface unless the deal needs to be sealed. Which can be to do with healthcare, restaurants, holidays, mutual funds, education and so much more. Every month, quarter and year, the bank will provide the Event Summary, presenting the balance, savings and earnings for the entire portfolio.
Customer segmentation, currently chiefly on Net Worth criteria, will bring in the element of psychographics as per the criteria above. The communication will be liberated from the current trap of offer-cum-emotion, instead building on the powerful pillar of experience partnerships, combing heart and mind in equal matter. To further be counted, banks will need to invest in human purpose programmes, associating with causes that further the quality of living – fight against cancer, child nutrition, pollution or literacy. Thus, building a well-rounded brand personality that connects with customers in a differentiated yet relevant way, across the chain of influence. Technology playing the role it is best suited to deliver, an efficient enabler of transaction, experience and eventually a sustainable relationship.
In sum, Banking 3.0 is based on the basic principles of emerging customer behaviour, where brands are appreciated for their role in fulfilling meaningful experiences, moving forward from being a relationship-driven destination. Every idea presented is well within the realms of legality and implementation, all we now need is a visionary willing to take this valuable plunge. When banks sincerely believe that they are in the business of Event Management for customers, lovable differentiation will once again be achievable.
(Shivaji Dasgupta is the Founder of INEXGRO Brand Advisory and can be reached at: firstname.lastname@example.org)
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