By Sean Hockenbery, Director of Client Services and Operations
It is no secret that the recent recession paired with the rapid advancement of technology has completely altered the banking landscape. In addition to dramatic technological changes, regulations have also changed, and will continue to do so. But the greatest change has been with customers. Bank customers today are much different than just a few years ago. They’re much more aware of their financial situation, what products and services are available, and maybe more important, what is being offered by competitors.
Customers have the control. This was proven by the mass uproar over debit card fees that led big banks to actually reverse the decision to charge the fee in the first place.
This leads us to the commonly asked question: How do banks—especially community banks—stay relevant? It’s going to take a fundamental shift in thinking. It’s going to take really understanding the lifestyles of those in the marketplace, and changing to meet them where they live and how they live.
No longer is it going to be about getting customers to the branch, which I can personally attest to. Having worked in a bank branch about two miles from my current office, I have not set foot in the branch itself in months, if at all this year, to do my banking. This is because the value banks provide to customers is no longer solely about transactions. Banks need to provide value by being informative, providing tools to manage finances and adapting to customers’ lifestyles—anytime, anywhere and however they want. To stay relevant, banks will need to create a complete user experience through all channels—traditional and digital.
The analogy I like to use for this shift in philosophy is to think about your bank like an iPhone. We need not be telling ourselves that it is enough to offer and promote online banking, mobile banking and e-statements. The goal is to think bigger. Think about the way your customers live. At the core, an iPhone is a phone. But how often do you see Apple promoting the iPhone’s basic phone functionality? Instead, the iPhone is all about the lifestyle of the consumer. It is a personal music collection, a photo gallery, a camera, a social media center, a weather reporter, a financial management tool, an Internet browser, etc. Or as one person I recently asked said, “My iPhone is everything I need in my life.” As bankers, we need to think less about the individual products that we offer and become the iPhone of our clients’ financial management system.
With nearly 80 million “Gen-Yers” in the U.S. who have spending power in excess of $200 billion annually, the need to position your bank to meet their lifestyles is greater than ever. It is said that by 2015, up to 50 percent of the U.S. population will bank via mobile devices. Does your bank create a maximum user experience via mobile devices? Many people do not realize that iPhones and iPads do not support the Flash technology used by so many banks for the primary advertisements on the home page of the bank’s website. I encourage you to view your bank’s website on one of these devices and ask yourself, “Would I bank with my institution?”
By the way, it is not just the Gen-Yers that we need to think about today. Baby-boomers are becoming more technologically savvy than many of us ever thought we would see. Over the recent Thanksgiving holiday, I learned that my parents, my aunt and my in-laws have all decided that they aren’t going to use their computers anymore—they have all bought iPads.
It is time to step back, think beyond individual products and services, and position your bank as a relevant institution that reaches consumers where and how they live.