The Changed Relation between a Customer and the Bank…

In my last blog we talked about what the banks would look like in the post covid era. I know enough has been written on it and many have speculated on how the world would look like post covid, in the so called “new normal”.

I was vocal on my opinion on how I think the Old Normal would be back, just digitally evolved for the better. After all that is how Humans have evolved through the generations. That is exactly what differentiates us from the other fauna.

After all Change is the only constant in life.

While I think Digital has happened and has hastened many a stalled plans by leaps and bounds, the bubble of digital would get normalised as things settle.

I would like to call it Digital for the Better.

I have used in multiple conferences, the balancing act of Art and Science in Digital would prevail in Banks too. The arbit side of digital i.e. the ART and the structured side i.e. the SCIENCE would balance out in the times to come.

The banks would need to balance out how they interact, what they interact and finally how they transact with which category of customers would go a long way to determine the strength of the relationship that a customer has with the bank.

Traditionally, the Baby Boomers believed in a single bank for all their relationships and investments. They believed in a so called Monogamy when it came to their investments and their money. In fact, this was also reflected in their jobs and their commitment to the bank and not vice-versa. I still know of some senior citizens who would visit a branch just to get their passbook updated. In the process, everyone in the branch knows them and the social circle also increases to “fellow passbook updation friends”.

The job of the bank was easy.

Fast forward to iGen or Gen Z. These individuals have just acquired money and do not believe in being faithful in their relationship with their bank. When it comes to money, they want the best corporates to invest into and get returns. They don’t have any sentimental relationship with the bank, branch, fellow bank friends etc. In fact, they wouldn’t have visited a branch for ages. They may have also worked with parallel fund managers to increase their profits.

Digital only made the Job of the banks tougher.

OR IS IT.

While Art and Science needs to be managed. The Generations of Customers also need to be balanced. Context and speed of gratification has to be very individualised to make it worth it.

In a recent project that I encountered for a bank, the bank developed the same way of transacting for two different countries. One was a phenomenal success, the other a great failure. What went wrong. It is the understanding that one size fits all does not work. We need to be sensitive towards the culture and beliefs of economy.

What has happened positive is that the Digital Literacy of people across the cultures has gone up phenomenally and created a level playing field. The policies we see to be culminating across economies are pretty much the same. We would take note of these re we proceed.

Digital has changed everything, from the way you onboard, to the way you service, to the way you lend, even the way you make payments.

Covid or not, this was in the making. The world found a reason to make it faster.

Lets handle each aspect one by one. Every aspect is a detail in itself. We need to address how each geography is handling it, coping with it, struggling with it. We need to understand the cultures which affect the adoption of the things differently in different economies. The Reg-Tech divide that has been bridged by some and is a struggle in the other.

Please follow the subsequent blogs as I unravel each journey, its implication and impact in generations to come….

Regards

Ritesh