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Understand modern banking by understanding the needs of the customers.

The banking industry is, as many other industries, undergoing many changes these years. New technology (with new possibilities), new competitors, and changes in customer behaviour and regulation is an everyday occurrence. In this world of ever more rapid change – how do you make sure you remain relevant and competitive?

I suggest we take a minute to focus on what remains a constant. The fundamental needs of the customers.

So, what is it, banks do for their customers?

I was reminded of just that, visiting the Development Museum in Saskatoon, Canada a few years back. Walking down the main street of a Canadian town anno 1880-1900 I stumbled on this branch of the Bank of Nova Scotia.

I of course went in to have a look. The branch essentially offered 3 features. The bank managers office, a counter labelled ‘Ledger’ and a counter labelled ‘Discounts’.

Other than establishing that somethings remain the same (the manager has his own office) the features also remind us what Banks do for their customers.

1. Banks help customers keep their cash (assets) safe – and ideally provide interest on the deposit.

2. Banks make it possible to access the cash (which is what happened at the ledger counter)

3. Banks help customers in need of lending/liquidity with loans and overdraft facilities (I suspect that is what happened in the manager’s office)

4. Banks also help with financial risk mitigation, taking over financial risk on e.g. Foreign Exchange and commercial counterparts. (The ‘Discount’ counter offered a combination of access to liquidity and alleviation of risk on receivables)

5. Banks help with the safe passage of your assets from one place to another (at the time facilitated by travellers cheques and armed carriages)

6. And Banks provide advisory, helping the customers to understand which financial products suits the needs the best

Over time the way banks make their services available have changed. And naturally modern banks also help with adjacent problems, providing cash management solutions, pension schemes, wealth management solutions, asset management solutions and so forth. The branch is supplemented by ATMs, call centres, web & mobile banks, debit and credit cards etc.

Focus on the needs of the customers - and find the best way possible to fulfil them

The Banks who have prevailed in the last 100 years have been the Banks who provided the above services in the best way.

So, Bankers – do not despair. The customer basic needs will remain constant. The Banks who provides them in the best way possible will prevail.

Let the best bank win!