Bank of the future – part 1

Ever since call centres and ATM’s where adopted as the first form of Alternative Channels banks have been looking for ways of offloading their branches and moving low value, high volume transactions to lower unitary cost channels.

The Internet promised to bring this offloading strategy to the next level, by providing a channel with unitary costs on levels a fraction of those in the traditional ones. Despite few honorable exceptions of institutions that have really given the Internet channel a life of its own, most banks have relied on alternative channels as a means of bringing down the operational costs, leaving the human interaction for the high-value commercial transactions and financial advisory functions.

This might have come to an end, thanks to two main factors that are driving a substantial change in the way banks interact with their customers: Mobile and Social Media.

Mobile: A life of its own

The exponential growth of mobile applications have finally created a channel with a life of its own, where customers are approached and serviced in a new way. Where services exclusive to this channel are offered, and where banks are fiercely competing to differentiate themselves. Mobile applications and the power of Smart Phones are allowing banks to expand their relationship with customers, no longer constrained to the provisioning of financial services, but providing an emotional link between them and the customers lifestyle.

It is not just about allowing you to make a payment easily, or to buy or sell shares on the move. It is about providing an offering that is meaningful for you, in the place you are, in the mood you are or in the stage of your life you are in. More and more advanced services are proliferating around mobile applications which deviate from the traditional approach of using alternative channels as a cost cutter.

Wisely used, mobile applications can help the bank be seen an enabler in the customers lifestyle, which is just what it should be.

Social Media: The focus shifted

Social Media has probably not created the concept of digital life, but definitely has helped bring it to a level where virtually anyone has a very complete digital life, which is no more than a reflection of one’s real counterpart. Sharing your real life in your digital one has become a habit for hundreds of millions. The activity in these media is such that companies can simply not afford to be there, where their customers life happens. Where customers express their views and opinions about companies and their experiences with them, and where the early adopters are already starting to do some good business.

The focus is radically shifted towards the customer, which now has truly become king, now yes, this being completely true. Now customers decide what, where and when. Customers decide how and where they give you feedback, and how and where they want to interact with you.

Yet another channel with a life of its own.

As suggested by the title of this post, more to come on very interesting forms of channels like QR Codes and Microsoft Tags, and possibilities opened by new technologies like Siri.