We "Value" our "Relationship"
Its always nice to be told "we value our relationship" and so i was grateful to my banking provider (full disclosure its not the one under my name) taking the time to tell me so recently. It did get me thinking though as to what "value" and "relationship" really mean...
Here is my "banking".....
(1) My salary gets paid into my main account but aside for money that's needed to pay the mortgage and bills....
(2) ….The rest immediately goes into my Neo account... Why?... Because i prefer the spend and save analytics, showing me what and when i spend, where I'm spending it, whilst giving me friction free micro saving ability through round ups...
(3) Savings- Via our friends the API's, I'm linked into Moneybox and Chip for all (well the little of) my savings. I top up a certain amount each week along with the round-ups, with the point being that saving is not something i have to put much thought into as its just happening in the background, friction and hassle free. Instead of me having to work out what i think i can or should be saving, I'm being guided in real time to what i can afford to save..
(4) Transactions- I had long done away with carrying cash around before Covid, but finally liberated my pocket and went wallet free during the first Lockdown. Pretty much everything I now pay for is via Apple Pay. The digital wallet has replaced the branded card and my bank has lost another potential touch point with me.
(5) Credit- Whilst i still keep a credit card for "just in case" purposes I'm increasingly finding myself using PayPal Credit or Klarna at the online checkout. Because its embedded into my purchase and happens seamlessly at the point of need for the time of need, without me paying any interest its taken even marginal friction away from the purchasing journey. I don't want to think about things, i just want it happen.
(6) Mortgage- Amazingly but unsurprisingly my bank made no attempt to discuss my mortgage when it came up for refinance last year. Whilst it hadn't been with them for years surely as the valued client, the narrative goes that i would navigate my way to their website, fill in a tedious application form to then be booked into a branch (shudder) to see a mortgage "advisor" who upon doing an affordability assessment to give me an agreement in principle would send me on my way to collate lots of documents and fill in more forms for uploading so a formal decision can be arrived at? (And Breathe) Compelling as this journey appeared, i elected to use a broker to find me the cheapest mortgage with the least amount of hassle....
….. Yes i know the mortgage journey has improved a lot over the past few years but it still remains marred in friction, manual entry, paperwork , and with a lack of transparency and far too many pain points.
The point to all of this is that to the bank I'm classed as a customer and apparently the relationship is a valued one.. and yet they know nothing about me, my lifestyle or my spend habits and over the years have gradually become just the vehicle for me to receive my salary into, before i go off and find "value" elsewhere... This is the case for millions of bank customers and right now as most incumbents are still caught up in trying to digitise analogue processes they can only watch (although probably don't realise the extent) that customers are increasingly moving away from the channel led, product pushed approach to one where experiences are embedded at the point of need, customised, with any "process" fully automated.
Now of course the banks are not standing still and no major incumbent is seeking to do anything but double down on a "digital first" led strategy, but the challenge remains how to do this against the backdrop of legacy infrastructure, technology and culture. They will need to be bold and become less fiercely protective of things they've come to hold true for so long. They will need to let go of the channel, silo, product and transaction led approach to really focus on the problems that need solving for consumers and businesses.
Applying the "problems to be solved' for SME's its evident that despite a real focus from both incumbents and new entrants, they remain under served from both a relationship and value perspective. From the incumbent standpoint bundling them into one bucket to provide non customised products and services under a fixed proposition means the relationship by default becomes transactional, and often even where the business has a dedicated Relationship Manager.....
More than ever businesses are staring into greater uncertainty and challenge and so the problems to be solved for a business owner are threefold:
(1) Help me make to make better more informed decisions...
(2) Bring the customised contextualized value and advice to me so i don't have to spend time and cost looking for it.. and...
(3) Connect me- Connect me to potential customers, suppliers, talent resource and networks.
Right now the banks have the customers and whilst not yet intelligent, the data. By being bold and thinking platforms, partnerships and marketplaces they can solve for all three of the above.. They need to and quickly before others do...… Doing so will really show how much a relationship is valued....