I’ve spent the past few weeks on the road on a mini-FinTech tour Amsterdam to NYC to Barcelona with another stop in London. I’ve been part of two cool industry events – my beloved TedXofFinance TM Next Bank in the U.S. and my newly acquired taste FinTechStage in Barcelona and I’ve watched the new Techstars cohort at Barclays and attended their Digital Conference as well as debated with the Cream of the Cream in Level 39 for the Banking Innovators Lafferty event so it’s been an intense few days that packed all the community has to offer from thought leadership to the new wave of FinTech dreamers and builders.
You’ll be relieved to hear I won’t do a full recap of each of them in this page. What I want to talk about is something that came up both during the “Great Digital Debate” between Brett King and Michal Panowicz in NYC and in the Oxford debate in Barcelona where Alessandro Hatami, David Brear and I argued against true innovation coming from banks hence making Brett’s Bank vs. FinTech argument.
You’ll also be relieved to know I have no intention to rehash the argument and have stated my position here where I argued Bankers have undercover Experience Supermen among their ranks and if they raise in time they can still win this race.
What I want to slash and dice is the notion of “owning the consumer”. This has been brought up every time we managed to dissipate the smoke screens of muddy banking terms and realised numbers and comparisons to other industries won’t really help, but we will eventually have to boil it all down to the relationship to the consumer to declare winners in this duel of ours.
“In the end, it will be all about who owns the consumer” was met with “hells yeah” nods in the audience but on Twitter it seemed to elicit a different kind of response which I found puzzling and frankly demagogical “No one owns the consumer” voices raised on the hashtags, “the consumers own themselves for crying out loud” the indignant misguided advocates claimed.
I’d like us to examine that because I find it dangerous.
Come on now, we have enough issues in banking without becoming coy about core truths. No one mistakes the nature of this term for an offensive throwback to slavery, do we really? No one presumes what we mean is connected to having their data or assets prisoner. We all understand what the spirit of the phrase is. We own a consumer with whom we have a strong relationship. A bond. Part of that bond is circumstantial (the unwillingness to switch banks in the UK proves it, in fact I am preparing another post about Irrational Bank Loyalty) and part is emotional connection with the bank’s brand (and that includes receiving value in service, advice or money). Whether that connection is conscious or insidious, whether the connection is positive or negative that’s a different topic but it’s there.
Every other part of Technology puts money, sweat and tears into finding Purple Cows to create stickiness, to have us come back again and again. Banking doesn’t have to, the sheer nature of the information and service they perform for us (badly or not) guarantees we come back. The real reason for the huge gap in customer experience between other technologies and banking is that there is no imperative to competitively create a positive, innovative and addictive experience, the banking customer has to come back, of course.
That’s a relationship. Not a hard earned one and perchance that’s what makes it less valuable to banks and if we’re lucky, FinTech propositions, neo and challenger banks will create slightly more tension in the market and reverse the trend on bankers even Googling what a Purple Cow is after reading this (there’s no link on purpose – pedagogy 101) but for now, no, they haven’t worked hard to get us so they do take us for granted.
No serious initial investment in acquiring something makes one think it less valuable and when reminded of its ownership one may well declaratively denounce it as a figment of someone else’s imagination “We do not own the consumer!”. How non-committal! But banks are not even a commitment-phobe really despite how they fit that label because in fact that phobia implies an element of pull, of seduction before the push, banking customers get none of the charming and all of the abuse – in other words the push only. Their reaction is just immaturity – a lot like that of a teenage boy hearing “I love you, I’m yours” for the first time when he didn’t expect it or indeed want it. And he reckons that if he doesn’t acknowledge it, if he blushes and says “that’s nice but I don’t own you, you’re your own person” then maybe he doesn’t need to do anything about it.
The -arguably eerie- comparison stops there, the teenage boy doesn’t need to then still help her and communicate with her and more importantly he doesn’t still benefit from this relationship unrequited as it is, the bank does.
So it’s not just “nice”, banks do own the consumer, they may not have their hearts but they have their money and their habitual attention and consumers need banks to grow up and own up to it. The more banks will own it the likelier it is they will start the hard graft of making it better, laying the foundation for staying relevant when it will be all about the consumer having a certain set of relationships who will give them most value.
If you want yet another point of difference between a Bank and a nimble FinTech company ask each of them if they own the consumer and listen carefully to their different reactions.
This is not a manifesto to eradicate the Stockholm Syndrome in Banking, it’s a plea to develop the Lima one. Please admit you care even a little bit, Mr Banker, you know you owe it to me….
P.S. Before anyone else points it out, I’m well aware how much of a game changer Automatic Aggregation (be it by EU directive or technology) can be and how then the customer will have so much more freedom and more tangibly see the data they practically own on top of the money which is evidently theirs. I’ve been talking about it for many years and it will indeed potentially enable change but just because Gladys can now move to Monese and see her entire financial life in one place (will she, guys?) it doesn’t mean she won’t still feel like her entire life belongs to HSBC, like they own her financial self and elect to stay put.