When was the last time you logged onto a mobile banking app, visited a cashpoint, or paid a bill? These are near-daily activities for most people, yet banks are now (perhaps unfairly) some of the world’s most reviled institutions. It begs the question: where did it all go wrong, and how can banks return to their position as a pillar of society?
People have a desire for the lifelong ally that banks so often lay claim to be in advertising campaigns. It could be that by reconnecting with the average person, these organisations can make good on those claims. Financial success (and the reinstatement of their position as a leading light in everyday life) for these banks will surely follow.
Trust in banks has been eroded over the past few decades. The financial crisis is still a major bone of contention and negative stories about money laundering and questionable investment practices are rife.
Behind all of this, banking is still a fundamentally vital and generally good industry. The people are hardworking, altruistic initiatives aim to assist the world’s unbanked, and quality relationships are still valued. Unfortunately, a small number of bad actors and tragic events have given the entire sector a bad name.
Part of the problem stems from banks having become isolated from their traditional base. These institutions exist to keep assets safe, grow them, and make and form financial decisions that follow an individual’s life path. We would argue that it’s a focus on profit rather than this purpose that has been the formerly respected banker’s undoing.
The years since 2007-2008 have seen a ‘burning platform’ ignited underneath this ancient industry. The treadmill of quarterly revenue targets, delivering shareholder value, and analyst expectations serve as kindling, while a customer-centric focus may extinguish the blaze yet.
While public perceptions of banks have slipped, these organisations are still designing and innovating.
The digital boom changed the world of financial services and we’ve since seen a plethora of creations and concepts that have improved the experience of ordinary people. Online apps have made it easier to manage money, while open banking has democratised financial data and set it to work for our benefit.
These are the great banking success stories of the past decade, but there have also been plenty of failures. Banks, like all large institutions, often create new products and services simply because they can rather than because they should - it’s an easy trap to fall into. Pet projects using the latest and greatest technology can be exciting, but they can also be very costly and distracting.
These initiatives often absorb resources without positively affecting people’s lives - and that’s a risky position to be in. Conversely, projects shaped around the wants and needs of customers can help banks to realign their behaviours and attitudes using a central purpose.
Kevin Costner told us that “if you build it, [they] will come” – but he forgot to mention only if they want or need to.
In trying to find a way back to their roots, banks could learn a little from ancient Indian wisdom. Ayurveda is known as ‘the Science of Life’. It suggests that we are all working our way through a cycle of events that influence our lives in different ways. Extending this principle to financial matters, customers can be better understood through the examination of their lifecycles.
The bank is already a steady constant in most people’s lives, but it can become so much more by moulding its services to their needs. Some organisations will need to revisit their plans to bring this vision into reality. We’ve spoken before about how the Ancient Greeks measured special moments in ‘Kairos’ time and that same non-linear approach translates perfectly to financial matters.
Technology is a fantastic vehicle for improving lives, but it can lack the personal touch that’s needed when dealing with a topic as sensitive as money and what it enables. When the time comes to purchase a home or save for the next generation, many people want to slow down to speak with a real person.
This is why, as banks disappear from our high streets, we should help the less technology savvy, or those unable to travel, by creating secure pods. They can provide easy access to advisors and other functions typically conducted in-branch. This is one great example of recognising the unique needs and wants of customers.
We, as well as others, have dubbed this ‘people-powered digital’, and it really does work. Banks that rediscover their purpose as advisors, mentors, guardians, and saviours can mark themselves out as positive figures in an increasingly complex world.
Ironically, these organisations can find the financial success they seek by taking a more central role in the lives of their customers. Before they can do that, they must understand the lives of the people they serve and ask difficult questions about their roles and responsibilities.
Banking has changed over the years, and some organisations have lost their way. Profit and corporate culture have influenced strategy and directed resources away from the historical roots of our great financial institutions – but change is possible.
We are facing a ‘perfect storm’ of challenges. Everything from a world trying to transition from a pandemic to an increasing wealth gap to increased costs of living, people feel disconnected and distraught. Some may even question core values such as equality and fairness.
Bankers have a once-in-a-generation opportunity to help to fight the fire and reinstate themselves by supporting people through the hardships to come. This will be no mean feat, but banks can start by understanding the needs, wants, beliefs, and desires of their customers before developing and acting on their ideas.
We adore our work with banking clients because when you scratch past the media-led surface, they’re paragons of what a societal pillar can be. Working intimately with them and their customers, we find new ways to connect with the world and inject purpose into everything they do.
The banking industry can reclaim its respect and build back trust, but only by putting the customer at its heart.