Imagine having instant and total control of your money. To spend, save, invest and pay whenever you need to just by tapping your finger or saying the word.
Today, by and large, you still have to come to your financial service provider, be it online, on a mobile phone or in the branch. But mobile device sophistication, network speed and innovation are converging to place banking straight into your hands.
For consumers these developments are good news as they will have greater control of their money than ever before. For banks, however, they represent one of the biggest and most fundamental shifts in the rules of engagement that we have seen in a lifetime. In the future the basis of competition for banks will not be products or channels, but how well they understand the needs of their customers. It will be about how much value they can add to people’s lives.
We live differently now. Together, technology and customer demand are driving a complete transformation of how banking is done. There is a growing global tribe of consumers who want anytime anywhere access to services and banking is no exception. These consumers are looking for personalised experiences and they want to be treated as individuals, not aggregated together.
The implication of this is that banks cannot continue as before and expect business to stay the same.Banks have to become not only innovators, but also proactive in coming up with solutions that meet customers’ needs, predicting those needs before customers know they have them. This means banks have to transform from utilities into service organisations that offer a great lifestyle experience.
I believe that banks now face a choice. Either to continue as they are and see new competitors infringe upon their core business – or innovate and become market disruptive, expanding those same boundaries to take banking into new territory. There is real scope in the next few years for banking to evolve beyond the basics of savings and lending to a much broader set of services. One obvious example is unlocking data in order to offer customers personalised, value-added services – alerting them to nearby deals or new and better ways to grow their wealth.
There is no point pretending a transformation on this scale is going to be easy. Banks are large and complex organisations not traditionally focused on innovation or speed-to-market. Today, many face issues getting the right technology for their customers. It is a long leap from there to the brave new world of banking. In the future, banks will have to become serial innovators, move with the urgency of start-ups and look for ideas everywhere. The task is not only to meet customers’ needs but to capture their imagination. It is a challenge but – in an increasingly digitised world – not one exclusively faced by banks.
Going forward, the industry has to pay more attention to how banking fits into different contexts – what it lets people do. In many ways, we have only just scratched the surface of how banking is going to change. As the boundaries of consumer banking become increasingly blurred, banks will need to forge new partnerships to meet customer demand. Banks need to study not so much each other, but other industries more adept at engaging and inspiring consumers. They will need to be prepared to form strategic alliances outside of the traditional confines of banking to reach people in the spaces where life is now led.
Steve Bertamini, CEO, Standard Chartered Bank
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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