John Kirk at Techpinions wrote a thoughtful piece on ApplePay ($). At the very end he says something about the customer <-> bank relationship:
But what happens when one doesn’t have a relationship with their BANK, when every BANK looks like another, when every BANK provides virtually the same services, when it’s easy to make a switch and when the benefits of switching are made clear?
He makes it sound like this is something the banks should dread. I think it’s just the opposite.
The study of Japanese swordsmanship
In the practice of iaido, at least for the organization I belong to, there is a set of 12 common forms across all of the organization’s participating styles of swordsmanship. Every grade level practices these forms regularly and permanently. Every exam and most competitions pulls the majority of required forms from these twelve, no matter how advanced the participants.
My instructor said something one that really resonated but that I’ve never really been able to convey well. After practicing these 12 forms for years, they get refined. Everyone is doing exactly the same forms, in a highly standardized way. There’s very little room (for all practical purposes, no room) for personal embellishments or alternative interpretations.
Does everyone look the same then?
Nothing could be further from the truth. In fact, when everyone works the exact same techniques to the same standards what’s left is a view into the practitioner’s personality. When I watch someone practice, I learn a lot about who they are because I’m not distracted by their interpretation of the commodity that we’re all performing.
Touching story, what does it have to do with banking?
When in fact banking services are completely commoditized, we can see the bank’s personality shine through just like we can with the iaido practitioner.
We get to see their priorities and decide if it’s a company we want to do business with. We’re no longer trapped by the friction/necessity of their products. We can literally vote with our dollars to support those companies that align to our values.
Let me give you an example of where a bank could spend it’s energy, if it’s not forced to focus on undifferentiated banking services.
Remember Norm from Cheers? He’d walk into the bar and be greeted with a resounding “Norm!”. Must have felt good to be Norm.
When I call my bank, how am I greeted?
“Hello Mr. Bressler. This is Ms. [garbled nonsense]. We appreciate your business. This line is being recorded for your safety and protection.”
Let’s dissect this for a second.
- I don’t know who Mr. Bressler is, but it’s not me. Maybe some old guy with the same surname as me?
- The last time I called someone Mr. or Mrs. (or Ms.) something was… let me think… NEVER. (Not really true but hopefully my point resonates.)
- My name would sound like garbled nonsense too if I had to repeat it 100 times a day. First names are so much easier because our brains relate to them better.
- You appreciate my business? At this point, do you know what business that is? You haven’t asked for my account number so I know you don’t know me yet.
- What you really mean is the line is being recorded for your safety, for compliance, and for training (since turnover in the phone-answering role is so high because you don’t like your employees any more than you like your customers).
If I get an email notice from my bank, what does it say at the bottom? “Please don’t respond to this email.”
If I use the mobile app from my bank, what does it feel like? It feels like they’ve written one app for iOS, Android, and the browser. It doesn’t work the way I’d expect it to, or the way I do my banking. I can either use their app, or not. I bet if you interviewed 100 banking customers, you’d find that we integrate banking into our lives in 100 different ways. And still, just one mobile app.
Enough said. My bank has no idea who I am or how I bank.
When basic banking service commoditize, banks can put their efforts into getting to really know their customers and differentiate based on personal service (highly focused and dynamic customer personas, informed by data).
It’s better for the banks too. Building a personal connection is way more sticky than capturing customers and getting them to stay because it’s so hard to switch.