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The Biggest Threat to Banks
It is true to say that the biggest opportunity and the biggest threat to banks around the world is digital, but have banks realised that digital, whilst presenting opportunities, also could destroy them?.. unless they change the way their relationship is with their clients.
Any change has to start with an admission there is a problem and many of the banks I visit are simply not acknowledging that problems lie ahead. With a firm focus on generating profits and cutting costs, banks are, without realising it, putting the power to choose, the power to change bank and therefore their future health in the hands of the customer - where traditionally all the power resided with the bank.
Let’s face it, how many of us have changed our bank account? Or if we have, how many of us have done so with trepidation? I am sure most. Yet in the new world, as I mentioned in my last article, consumers will have the power to change in an instant, to rate and destroy businesses in the blink of an eye. It is this management naivety that will mean the loss of more high street banking brands as they fail to keep up with the changing world we live in.
What needs to be done to put this right?
The culture in your organisation will play a huge part in its success, we only have to look at the ‘one Ford’ example that I have written about previously to really understand the benefit of a solid culture program in an organisation - and the power this can have in turning around an company.
This week I am in Kenya. During my trip, I met with a bank here called Equity Bank (@equitybank). A second solution may be in their approach... and I can see how appealing this banks approach will be in other markets.
The CEO of Equity Bank is a chap called James Mwangi. This man is a genius. He has recognised the need for banks to own the distribution channel and has developed an insatiable mobile offer called Equitel. Equitel has three simple principles:
My Money
Access all your banking services and manage your money with ease and flexibility
My Phone
Make phone calls and send messages at cheap rates
My Life
Get exciting, personal content on your phone
When I appraise this service, the interface is rudimentary, not the sophisticated graphical user interface we are used to seeing in many of the modern apps and services given to us by mobile operators in the region. However, when I consider the business model this bank is delivering and how they are making moves to be at the heart of their customers life, with personal and meaningful content, I have to take my hat off to James and his team. Their thinking is brilliant... and just like SafariComm (@SafariComm) did with mobile payments, this bank are changing the face of banking.
The rest of the world had better take note, Equity Bank will succeed. Before long, it will not matter where you are in the world, what your nationality is, or your banking preference. Businesses like Equity will be there. Offering convenience in the palm of your hand.
