Going Beyond Traditional Banking – Are You Ready?

At the CBA LIVE conference this week, the theme you see everywhere is to go “beyond the bank”. This made me ask the question, “What is it that we think is the “beyond” when it comes to banking?”.

I think that first you have to define what a Bank is before you even begin thinking what it means to go beyond it. If you look back in time, and also just ask most people on the street today, the answer will be: an organization that lends money or holds deposits of money. That is true to some extent, but what assets beyond dollars does your bank have? Look at all the insights you have on your customers—you know where they get their money, you know what their needs/wants are (based on their spending), what their behaviors are, and to an extent through your householding you should have insights into how those needs will change. You have more information than most of their closest friends or family members may know!

Now take that knowledge and add on the other capabilities you have like strong tech and security teams, channels, etc. And now with all of that, let’s reframe the question to, “What is your bank’s beyond, and what is your bank’s future going to look like?”.

If you are sitting there and scratching your head still that is okay. In fact, when the audience at CBA LIVE was asked how good they (or their executives) were at predicting the future for strategy purposes only 8% of them said that they could comfortably look out past two years. But, the fact you are reading this means you want to try to take that longer look. To that end, let me share with you a few questions you can ask yourself or the rest of your bank’s team sitting around the boardroom, to spur some thoughts.

First, How Much of Your Bank Can Be Replaced by Artificial Intelligence?

We are rapidly moving from the Information Age to the Age of Engagement. I define this by having services and products that involve and engage customers much more deeply. But you need to balance this against knowing at what level your customers want to interact with AI. It is a fine line between service and well…creepiness.

Second, What Direction Will Your Banking Services Go (i.e., Will You Have More Consolidation, or Fracturing of Services)?

Here at CBA LIVE I am seeing more banks and vendors that are extending the services they offer. I even talked with one vendor that actually wants to take on a limited power of attorney role to be able to perform certain tasks on behalf of the client. That way the bank customer can continue to focus on his/her life and not having to wait in lines or deal with tasks that are not adding value by doing it themselves. In fact, I heard one executive at a top bank say that they are looking to just give “acts of kindness“ to the customers. So what are you doing to enrich the life of your customers?

Last, How Will New Leadership Change the Game?

Regardless of what your team does, innovation will continue to grow exponentially and the tech curve will grow. However, because of our human nature (and often because of organizational processes) the human factor grows logarithmically. This creates a strategy gap—and a huge challenge for any bank. So how will your leadership change strategy so their impact can be seen exponentially and close the gap? This will require that you obtain the right talent, grow that talent, and empower that talent to make change.

As you ponder what the future of your bank will be, I’ll share a great quote I overheard here at CBA LIVE. We often hear that we should not bite off more than we can chew, but when it comes to your bank’s future, “…would you rather choke on greatness, or nibble on mediocrity”? Go big, and go beyond banking.

Author Bio

With more than 25 years of experience in the financial services industry, Mike Horrocks possesses a unique and extensive blend of financial expertise, technology skills, process redesign abilities and solution management experience. Horrocks’ background enables him to create go-to-market strategies for new solutions, help clients convert strategies into revenue generating initiatives and forecast market direction.

As the Vice-President of Product Management at Baker Hill, Horrocks’ responsibilities include the identification and development of new market opportunities in the business of lending, risk management, and analytics for financial institutions. Mike holds a MBA both in International Finance and Venture Technology Management from Indiana University and a B.S in International Finance from Brigham Young University.

Before joining Baker Hill, he held executive positions within several other organizations, including Experian, Profit Technologies, SAIC, Broadway and Seymour (FIS), Zions First National Bank and Zions Data Corporation.

Horrocks is a member of many associations including the Risk Management Association and Bankers Without Borders. In his free time, he enjoys traveling internationally with his wife and five children.