In the process of digitization and automation, it is easy to loose touch with your customers, especially if the ‘stuff’ you are dealing with is something as abstract as an exchange item; money. Restoring touch-points becomes main focus.
Grocery stores went through the process of digitization and automation. Starting as small shops, they where used to serve each client in person, and would know their clients in person. Then, in the beginning of last century, long before digitization and big data, they went through the process of first introducing self service, and afterwards, with the introduction of digital tools, through the process of using data (and loyalty cards) to understand client behaviors. Grocery stores had the luxury of a step wise introduction, first automation/self service, and then the introduction of advanced analytics to understand client behavior from data by means of data collection and statistics.
Grocery stores have one big advantage; they deal in physical goods. You, as a client, need to go out and get it, or someone needs to pass by and bring it to you. In short, intrinsic (still) is a personal transaction. This means that the whole process of digitization and becoming a data driven industry was developed while having a personal contact with the client.
Banks do not have had that advantage. Banks deal in somesthing abstract; a means of transaction. In the process of digitization and automation has removed the need to actually visit a bank or talk to a bank agent. The ‘transaction means’ in the past may have relied on physical goods (paper money, coins, remember Scrooge McDuck swimming in his money) nowadays it is digital and growing more and more abstract. Clients have access without ever having to enter a bank filial or meet a bank agent. On top of having lost contact with their clients, banks also have 1000 and 1 technology driven start-ups with innovative business models eating away at the basis of the bank’s income. Ideas such as peer to peer lending and robot advice (where investments are driven automatically by computer models following market trends instead of by human analysts).
Not surprisingly, banks have two important interests: touch-points and big-data.
What I find surprising is that the banks strategies are technology driven. For example, the UBS (or here, see page 9; the great transformation) list the following as main trends; privacy, self fitting products, wealth assistant (robot advise) and decomposed wealth management, all of which increases the reliance on technology and reduces the need for personal contact. Credit Suise, another major Swiss bank, “… announced that it is committed to making significant investments in expanding its client facing technology globally”
Why is technology seen as the solution for a problem created by technology? I am assuming of course that the main challenge of Banks is the growing distance towards their customers, which was created by automation and technology. You may dispute this. But if the problem of the banks are lack of contacts with their customers, shouldn’t the strategy be ‘getting in touch with the customer’’. Yes, technology may be a means in itself, but certainly not an objective.
Maybe it is sufficient to reduce MBOs to the following simple questions; When did you last ‘speak’ with a customer and what did you learn?
Btw, I thought the cartoon at the top of this page was funny and original. I was wrong; https://youtu.be/gWzhHInOiaY
Fred Voorhorst works as consultant for the FinTech industry, focussing on optimizing/improving wealth management advisory processes.