The Human Bank


July 2015 is coming to an end and I wish the same could be said of Greece’s financial turmoil.  I am not sure much has been achieved this month, either via the referendum phase or the last chance agreement that was subsequently crafted.  What I know for sure is:  one – hard times are not over for the Greeks and two – the general climate of distrust of banks and finance has just deteriorated once again.

This episode is the latest one in what seems like a global demonization of Finance.  In 2012, the French president got elected after violently campaigning against finance, going all the way to declaring it his “true opponent” during a defining speech in January of that year.  Just recently, The Pope himself joined the chorus and denounced financial policies in his recent visit to Latin America.

Finance has become the new devil and banks its minions.

I certainly do not see them that way, and I am actually proud that part of my work at ng Connect is geared towards the financial services industry.  Finance, to me, is the fuel that enables life-changing projects like buying a car, a house, or going to law school, starting a business, or building a water supply for sub-saharan countries, or sending a probe to Pluto and Man to Mars.  How, indeed, would we be able to do all this without a global system that allows funding of our greatest initiatives, governed by global rules and served by an inter-connected banking network?  Can you imagine a world without finance and without banks?  Does this opponent really deserve defeat?  Is this really the problem, or is it a new scapegoat that hides a deeper crisis of values and faulty human behaviors?

I sometimes – and quite inadequately, I admit – compare the situation in Greece to a band of people going on a trip in the mountains.  They leave in their SUV with full tanks and drive like maniacs, enjoying the thrill of speed on curvy roads.  But then, they realize the fuel gauge is going down really fast, and stop at one of the few gas stations in the area.  The fuel prices there are much steeper.  However, with no alternative, they fill the tank and continue on their way.  After a while, they finally realize they really should slow down and change their driving style.  They may even need to replace the driver.  Still, as they drive on, the gauge is going down bringing them closer and closer to being stranded in the middle of wilderness.  Lucky for them, here comes a tow truck and that’s where the argument begins.  The truck driver does not want to give them his extra fuel because they cannot pay for it, while they do not want to be towed to a destination they did not choose with an uncomfortable ride.  I believe that any compromise at this point is a better outcome than leaving the SUV occupants stranded.  I also believe that blaming refineries and gas stations misses the point: this is all about responsible behaviors and politics.

So, in this global concert of criticism and vindication, I wanted to speak up in defense of finance and banks.  But I am also very aware that banks and finance themselves harbor some bad behavior and misplaced values.  The subprime crisis, and several scandals involving traders paid in the seven-digit range, remind us all too well that, more and more, executive leadership is driving banks to generate increasing profits and shareholder returns, sometimes at the expense of their primary mission which is to protect and help develop customer assets.

As they deviate from this mission, it is only logical that they lose their customers’ trust, and that people limit their interactions with banks, whether in-branch, online, or via any other channels, to the strict minimum.  Because, beyond the aforementioned, highly publicized scandals that revealed banks have other priorities, recent data indicates they are also failing at the basics:

  • on security, as theft, fraud and piracy are all on the rise and millions of private customer records have been stolen in the last twelve months
  • on customer engagement and customer experience as access to credit and payment facilities has become more difficult, despite historically low rates. More alternative funding and payment options have appeared in the past few years than ever before

If banks want to regain the trust of their customers, they need to act immediately and decisively, on both fronts.  And they have the means to do that, since they top every other industry in IT and communication spending. At ng Connect, we are hoping to help banks and other financial services companies improve their reputation and develop their business. As such, we are currently working on no less than five solution concepts aimed at the financial services industry, including:

Security improvements

  • Taking online banking off the Internet via a PBN (Personal Banking Network)
  • Seamless two-step authentication at the ATM

Customer engagement and experience improvements

  • Multi-purpose Interactive Signage in- and outside the branch
  • Branch analytics and customer experience optimization
  • Omni Channel Customer Intimacy

If you are interested in finding more information about our projects or in contributing, keep in mind ng Connect is a free and open collaboration environment, and we welcome everyone to join the conversation.

While implementing any or all of these will go a long way in re-establishing the necessary customer trust, it will only meet the standard expectations.  Yet today, in many domains, such as technology, automotive, retail or healthcare, customers are being spoilt with products, services, and experience that go well beyond their expectations.  Granted, it’s easier to marvel at a super slim tablet, a shiny roadster or a brand new MRI machine than a checking account.  But if they truly want to develop their business and turn this re-gained trust into a sustainable advantage, financial services companies need to come up with this type of innovative experiences.

Several posts ago, I wrote about an innovation summit in San Francisco and mentioned a presentation that looked at companies’ adjacent spaces and examples of ones, such as Amazon, Tesla or Red Bull and others, that successfully expanded their business while driven by the same broad quest and mission statement. When I look at the quest of banks, the way I phrased it before, “to protect and help develop their customers’ assets”, a few ideas of adjacent spaces come to mind.  Our personal assets, after all, are not necessarily financial: it could be our body and health, or our knowledge and education, or our connections (family, network of friends and relations). Leveraging their powerful infrastructure, with strengthened security and enhanced customer intimacy – hopefully thanks to some of ng Connect’s solutions – banks could offer new services that reach into these spaces:

On body and health, it is in the bank’s interest to maintain healthy customers.  They could forge health and wellness partnerships and alliances, where your ATM card could be the next membership card to a gym.  They could also help fund medical care in certain situations, or provide facilities to people suffering from chronic diseases.

On knowledge and education, again it is in the bank’s interest to have a highly educated customer pool, as these are the ones with the highest income.  Banks could, as they already do sometimes, help fund advanced education programs.  They could also deploy their own program to educate customers on financial products and techniques and use their branch network to provide classes – not unlike Apple workshops in their retail stores.

On connections, banks could develop communities among their customers and facilitate interactions, they could turn their branches into a place where people can hang out and easily network with others based on common interests.  For example, instead of just speaking with the bank’s mortgage specialist, customers could get feedback, tips and recommendations from others who purchased a similar mortgage. Banks could also, at a very local level, help entrepreneurs meet local investors in their premises, during informal pitches.

These are all just ideas, not very refined at this stage, but that demonstrate the potential that financial institutions have to transform their business in the near future.  The first order of business is and remains to restore trust, and it is an uphill battle, facing a lot of negativity in the media in general, and some real operational issues, such as security or branch management, in particular.  But once addressed, banks are left with a unique infrastructure, with impressive IT and real estate networks, and a solid and very intimate customer base.  If the priorities are right, and the banks really seek to help their customers first, then they are in a great position to branch out into new spaces that will help us all meet our goals of tomorrow, and generate positive and reasonable value for all the stakeholders in the process.  This is why I like working on finance.

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