Forrester reveals report's findings on the future of banking, saying banks must clear out most or all of their executive suite.
According to the new report, the bank’s self awareness is the most important factor in the future of banking success and not branch strategy, customer experience, branch strategy, or cloud utilization.
“The biggest thing holding banks back plays out in their culture,” said Alyson Clarke, principal analyst at Forrester.
“The problem with banks is they get in their own way because they want to be best at everything, they want to own everything. They have a reluctance to go to cloud, reluctance to partner and be part of a larger ecosystem, so they build all their own technology and the technology goes out of date.”
Banks must consider their organization and find out where they do well and where they do not and then invest, partner with a fintech, or even another bank. However, they have to decide fast.
“If you wait too long you will fail. “Some firms and some individuals, get that it can be very hard to move these big ships, so they may need a sweep of the executive suite. I hear all the time…how slow are these firms to change, cultures get in the way of decisions… “I hear ‘We are still making a lot of money, we’re fine."
“Google will build account opening like a mobile banking environment. As a customer I go in and pick the products, checking or savings, through an amplified Google Pay platform. On the back end, the bank is owning the product, moving money, but customer interaction is through the front end that Google is building. So whilst it looks like co-branding, will customers see the (bank) brand and care, or will they go to the marketplace and see who has the best interest rate and go with it?”
Clarke believes customers will see they are receiving value from Google, in the form of financial management budgeting and rewards programs with incentives to use Google Pay.
“We know Amazon and Google are masters of this, their businesses are built on data.”
“The focus on data in banking is let’s find out what we can about our customers and flog them another product. But banking is not like Amazon where you buy a product often. We buy financial products every three to five years. So when banks focus data energy on selling products, they are probably just annoying customers. They have have overestimated the importance of their bank’s brand in the consumer’s life.”
“For Apple, it’s a long-term play. You can’t measure success on the same field as a credit card. Apple doesn’t need revenue in the same way; they need an attraction to the brand. They want people buying more devices using Apple Pay, and they can turn up the dial on incentives and rewards when they want to.”mer’s life.”
