Bank Of The Future. A Relationship Business?

Bank Of The Future : Robots, expert systems, self-learning machines, and automatic risk assessment, offer real opportunities and are here to stay. However, financial institutions must be careful not to ignore human behavior. True customer relationships are ultimately only built person-to-person and are essential to success. Despite the digital tide, the banking business remains, for the time being, a relationship business.

A bank that only exists on your mobile, without branches and with 400,000 active customers and 25,000 waiting in line to be part of this community.

How is it possible to affirm that banking continues to be a business of relationships, maintain that these relationships are perfected person to person, and at the same time assume that the banking of the future is something similar?

At first glance, the bank has limited appeal, especially against old crocs like Nationwide or First Direct. There are no setup or usage fees, and no foreign spending charges. But there are also no branches and no mortgages or savings accounts, just a prepaid MasterCard. But for people who spend their lives on their smartphones, it’s more than a conventional bank. “It’s much more emotional.”

The Medium-Term Future Of Digital Transformation Is Still Unpredictable.

Fintech, blockchain, online onboarding, and advisory robots: financial services are no exception when it comes to digital transformation. Much of what was once pure fiction is already on its way to market.

The challenges posed by digitization are as important as the potential benefits, yet too often they are ignored.

It is possible that over time different business models will be maintained and coexist, even sharing clients. New initiatives that currently arise, can be extinguished in 5 years or even less. They can be gobbled up by other, older spices or even serve as a foothold for equally disruptive but more resourceful options. (Google, Apple, Amazon?).

However, any of the models that intend to survive the tsunami will have to get to work on the following aspects of their relationship with clients.

A Multi-Channel Interface Combined With Customer Behavior Tracking.

Digital tools should not replace client advisors but should support the process of building a strong, trustworthy and sustainable relationship with clients. In scenarios like these, transparency is key. 

The entire customer relationship must be reflected in an intelligent software solution. With the help of the right tools, the generated customer data needs to be thoroughly and continuously analyzed. In addition, effective behavior monitoring must be integrated into the system, as the points of contact between clients and client advisors continue to shrink. Thanks to behavioral monitoring, client advisors can quickly and efficiently detect when personal contact is required. 

As digital transformation leads to a decrease in the number of touchpoints between the client and the client advisor, the remaining touchpoints have to match even more closely. The procedure is no different than dating platforms. Instead of matching clients and advisors based on random criteria, such as the first letter of the client’s name, the key criterion is whether the individuals’ personalities are highly compatible. 

We all know that having similar hobbies, lifestyles, and educational backgrounds is the fastest and most effective way to pave the way for a trusting relationship. On the other hand, recent studies in this field have shown that in situations of optimal “matching” between advisers and clients,

Digital Tools On The Client Side.

Just as client advisors need the right digital tools, clients also need their own digital tools to carry out daily banking activities. But the most important thing is that they must be extremely simple. Unlike car configurator tools that can be used to select a new family car, comparable tools for banking or pension planning and financial transactions are seen as more of a necessity than a form of entertainment. 

KISS (Keep it simple, stupid).

Traditionally, banks operate with a portfolio of 100 to 150 products. Of these, only between six and ten are used effectively by most customers. Additionally, for online solutions, the churn rate increases by 50 percent with each additional click.

One way to keep things simple is to turn to modular, package-based solutions. It is about building packages with common functionalities for different customer segments. Customers can thus see their purchase options simplified.

However, these packages may not be equally attractive to all customer segments. In other cases, modularity can be beneficial for clients who are more sophisticated, more financially literate, and more aware of their own needs.

Fundamentally, the most important aspect of the tool is that it should minimize the mental effort that the customer needs to make during the purchase decision. When this happens, it increases the chances that customers will be able to buy all the services they really need. The reassuring effect of having found a comprehensive solution increases customer satisfaction and confidence in digital tools. But it also increases confidence in the bank and in your personal advisor.

The Human Component Sets The Limits.

For now, the discussion in many traditional banks has focused on efficiency measures, cost cutting, and labor reduction. Anything that can be automated, virtualized, or robotized has already been digitized or soon will be. In this relentless transformation, the employee has become an obstacle. Human beings are simply too slow, too unstructured, and follow their emotions and feelings too often.


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