“The bank always wins,” is a popular saying. Anyone looking at the press releases of the last few years will have great doubts about it.
At the turn of the millennium, when I decided to start a bank education, the (banking) world was still in order. Banks and savings banks were considered popular employers with high job security and good salaries, their employees enjoyed a good reputation and were respected. But in the meantime, this healty world can only be found in the history books and the memories of veteran employees, who wonder how it came to be.
Many a bank manager will now quickly come up with a whole range of external factors that have hit the banks hard in recent times.
The financial crisis, the protracted low interest rate environment and, not least, the digital transformation and attacks by fintechs and internet giants are happily taken here.
At first glance, one would like to agree with them and could conclude the article herewith. But maybe it’s worth taking a closer look.
Lack of customer focus
No doubt about it: the factors mentioned above actually put the banks in a tight grip and severely tie up management capacities. But they are not the only thing that bothers the banks: there are a number of home-made deficits that emerge as the root of the evil.
Probably the most important reason is the lack of customer focus. After all, all major banks (groups) continue to think primarily in products and their monetization – but unfortunately not in customer problems and their solution. Often this point was discussed z. For example, on the subject of “payment”: Customers do not want to pay, they want to receive goods and services. The payment process is a necessary evil, not a product that banks can market. Customers do not want mortgages, they want to live. They do not want a retirement plan, they want to provide flexible retirement.
When banks introduce innovations, the focus is rather on media-effective lighthouses instead of supposedly boring topics that bring with them direct customer benefits. ”
In addition, many banks fail to realize that basic banking products and services are extremely arbitrary and interchangeable. A checking account is a checking account is a checking account. The same applies to savings accounts, consumer loans or mortgage lending. The pure product usually differs only by the conditions.
Nevertheless, almost all sales directors think that their bank has to be on the start in all product categories with its own products – even if they are not competitive at all. From the customer’s point of view, a best-in-class approach would be much more useful, in which the advisor bank sells the best product on the market in a similar way to a platform – and if it is a competing product, then it is just against commission.
Overall, however, the collaboration in the industry is very expandable. ”
Instead of tackling the necessary investments in the digital future together, strict silo thinking usually prevails. So you rather moan about the high costs of digitization, instead of developing something together. Exceptions like Paydirekt confirm the rule – and at the same time show how bad the cooperation in such a case works.
In addition, Europe’s banks are regularly limited to their home market – and that in a (still) limitless European Union. Particularly in the area of payment, a self-restriction that drives customers into the hands of global providers such as PayPal.
Technical and procedural contaminated sites
As if all that was not bad enough, our banks are still suffering from their past. In particular, the outdated IT systems and the resulting complexity due to constant expansions burden the ability to innovate.
Incidentally, with the new instant payments, the banks have once again lost an opportunity, because they still live mentally in the good old days. Instead of declaring Instant Payment “new normal” at no extra cost and seriously harassing PayPal, they would rather try to earn money directly on this spasm crunch. This naturally leads to the fact that hardly anyone uses it and millions of investment rubble barking away.
In addition, there are traditional procedural constraints such as the fact that payments are suspended on weekends and holidays. Especially when most people have time to (online-) shopping, no transfers are made. The inclined eBay customer is the only reason why PayPal pays. While payments are processed like e-mails 24/7, the limitations of the banks remind you of the good old stagecoach. A legacy from the days when payments were still processed by hand.
No saturday work
And bank employees do not traditionally work on weekends. The union Ver.di knows how to prevent so far with sayings like
Saturday my daddy is mine! ”
This is a catchy slogan, but it seems like it fell out of time. After all, the average Joe-Banker gets on Saturdays like fresh bread from the bakery, go shopping in the supermarket or the city and the hairdresser, in the evening only food and then to the cinema …
Only one thing they do not do on Saturdays: being there for their customers. And they would certainly prefer to talk about complex issues such as mortgage lending or retirement planning in peace on Saturday with their advisor, as in the week after a rush after work. After all, there are scattered bright spots in the collective bargaining agreement thanks to opening clauses. And those are also sorely needed, after all, the digital competition is usually well accessible on the weekend.
Customers train employees
After all, the fledgling consultants are the big differentiator of traditional banks versus online banks, FinTechs and the Internet giants. Theoretically, at least.
In practice, this is often put into perspective quickly, because customers are now well prepared, thanks to the Internet, when they go to a branch. Unfortunately, they often meet employees who are significantly less well informed.
Especially when it comes to digital offers, it means more and more: customer trains employees. ”
This is of course fatal, because such employees cause high costs, but offer customers no added value. The employees would therefore have to keep much more up to date, otherwise dissolves the alleged competitive advantage quickly in the air. With the still above-average salaries of the industry certainly not asking too much.
The banks still have a lot of homework to do – and my listing does not even claim to be complete. But this already shows that the banks do not have to do much less than reinvent themselves to a large extent.
Old braids have to be cut off and the mindset completely turned, the industry wants to continue to be relevant to their customers. ”
Otherwise they are threatened with the way to the museum. Then it says: “The last one turns off the light.” I hope that it will not come so far.
Also published on Medium.