Incumbent banks are in a bind and need to undergo rapid change. I don’t think anyone who knows anything about the ways in which the financial industry is going to be challenged thanks to technology would argue otherwise. I’m not going to re-list the threats here. The list isn’t extensive, but is sufficiently powerful and compelling.
I’m not even going to bemoan the pace with which banks react to these very serious enemy-at-the-gate signals, which is indeed alarmingly dismal. What I am going to do is break down who it is that’s in charge of this change.
Banks are complex organisations with indescribably many (and occasionally highly nonsensical and useless) departments. At the core of them, like in any other company, you will have on the one hand the business side, and on the other the technology/IT/operational side.
For the purpose of this exercise, we should leave the ‘IT side’ out of it. While they certainly can help by sharing into the big ideas, they are typically already further ahead in understanding what could be done, yet have little in the way of power to make it happen. The myth of the solution architect (or even the compliance guy for that matter) sat in the corner of the meeting rooms where exciting ideas fill the air, only to shoot them all down at the end because “that’s not possible with our technology/regulatory framework”, has been dismantled by the past few years, when he is often the guy suggesting big changes.
Another side of the bank to leave out of this is the BOD/strategy/bigwigs layer. Not because they shouldn’t be responsible for change, obviously, but because the horse of how old, stuck and inflexible the board members of banks are, has been flogged to its unsavoury demise and it’s now a truism that brings nothing to the discourse. Do I believe the voices calling for new or at least improved blood are wrong? Not necessarily, but I believe change can ripple towards our existing structures if it starts in the middle layer. This leaves us with the following players who need to roll up their sleeves:
- marketing and sales.
When it comes to digital – whether it’s product and service design, experience, strategy, or any other name of any other department and team that offers the consumer a bank product in any other way than by phone, ATM or branch – they have been shouldering the brunt of the need to change burden of every bank for the past 8-10 years. And while, yes, they are the future – and a bank’s best bet in winning any of this – theirs is a tough role, too busy responding to rapid change while trying to balance sheets to ask them to do more for the culture of the organisation.
The innovation teams – the hubs, the labs, the funds and so on – they have their sleeves rolled up. Whether their efforts trickled down to consumers and their existence should continue in a bubble or be firmly woven within the fabric of the bank’s organisation is another story for another day, but it’s undeniable that they have been trying hard to show that the ship is sailing straight for the iceberg of sudden, devastatingly powerful competition over the last few years. Sadly, when they now warn the powers-that-be, in even stronger terms, of the imminent nature of these changes, and how banks will become pipes if they ignore the need, theirs sounds like a ‘Boy who cried wolf’ moment.
HR, in my opinion, firmly holds the key to meaningful and lasting change, and to my delight, some banks now recognise this and are starting to make the moves to show that “it’s all about the people and the culture and not the technology” is more than just a nice slogan. Personally, little excites me more than my work with one of Europe’s leading banks, who not only empowered H. to lead fundamental organisational change, but allows them to explore topics that cut deep such as language, knowledge, courage and passion. As much as I love what they’re doing, and how I think it’s future-proof work, it’s a long and arduous road to seeing it aid the other players in immediate shakeups.
Which brings me to marketing. I’ll come right out and say it: the marketing departments of banks are the weakest link and they need to wake up. There are good explanations as to why they are de facto stuck in 2002 in terms of practices and output, and yes we can blame the bigwigs for confining them to a corner where they manage budgets and create ads while thinking of the colours and not the core of what they’re doing, but we cannot excuse it forever.
It’s no secret that I’m militant about the fact that banks are the only consumer industry unconcerned about being a beloved brand, and unless this radically changes it will be the reason for their demise.
A true brand creates powerful connections to the people who believe in it. A brand lives and breathes. It’s introspective and organically innovative. It spurs ideas and change and aims to ensnarl its customers with yet more expected awesomeness at every opportunity. A real brand is addictive.
Who should be the creators and guardians of the brand? You guessed it: the marketing department. The gap between that fundamental job and the job they’re performing today is staggering. The mere fact that marketing departments of banks call the document that provides details of what fonts and shades of colours should be used when talking about their company ‘brand assets’ is ironic, no less because it shows the full contents of the notion of ‘brand’ as they use it.
In other industries, marketing and product are fusing. Customer experience and design have become the hub of strategy. Retail is recognising that surprising and delighting consumers is an everyday imperative in this new reality of rapid innovation through technology, and they’ve long known that having an extremely strong brand is the only way to hold a relationship with the consumer enough to have the opportunity to continue to surprise and please them.
None of this is happening in banking, and much of it is the marketing department’s fault.
There are ‘pockets of better’, where a bank has marketeers avidly inquisitive about their consumers and intensely interested in creating and upholding a brand. Yet, these banks are the mBanks, the CheBanca!s, the INGs, and not the big, heavy incumbents that need it the most.
So, dear marketing – you must know that your job as it is today, stripped of the human element, devoid of creation of lasting value, will be one of the first ones to go as soon as machines take over in the not-too-distant future. You must also know that you could be the key to this intensely needed change if only you imagined this was Ugg and not RBS you work for. So please, for all our sakes, put down the press release and grab the brand.
– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Main image: sodafish, Shutterstock.com