24 September 2019
Use your resources where you can make a difference to your customers
How should banks respond to developments in society and in the sector? For Helle Koggersboel, senior product marketing manager at Worldline, there is no such thing as a one-size-fits-all strategy. However, she has a clear message: "In any case, look around for partners. Find somebody who can help you minimize the cost of commodity services, for example." During a full Open Theatre session at day 2 of Sibos, Koggersboel refers to an African proverb to strengthen her story: "If you want to go quickly go alone, if you want to go far go together."
Changing circumstances for banks
A lot has changed for banks in recent years. Koggersboel mentions the most important ones: changing customer demands and regulations, changing business models and the arrival of new players. Koggersboel: "Now consumers are fickle and demanding, due to exposure to fintechs, neo-banks but also to social media. It is difficult for traditional banks to adapt to these quickly changing customer needs."
The business models are also changing drastically. According to Koggersboel, the world is becoming more and more event driven. "Pay-as-you-go and subscription models are currently winning. We are moving from ownership to subscription models. So, no annual premium for your travel insurance, but you pay per trip. This means more and more transactions, because the consumer wants a customized service. And something else, and that's not new, is the fact that we are moving to a 24/7 instant world, but I still see banks that are not 24/7. This is a big issue, because it is not easy to turn into a 24/7 bank, neither their IT-systems nor their operations."
Shift in revenue
Besides these changes, competition for banks has become fierce. New parties are visible in the market, such as fintechs and bigtechs. But Koggersboel points to an interesting question: are they friend or foe? "I think they are both. Fintechs were initially seen as a threat but are now more and more seen as partners. Bigtechs are more scary because they have more resources and can respond well to customer demand."
So, what would be the solution for traditional banks? A very tough question to answer, says Koggersboel. "It depends mainly on what bank you want to be and what you are right now. Some banks might be happy with being a utility service, anonymous, just providing the account. Some might want to be a full-service bank, or even a variation on it. There is no such thing as a one-size-fits-all strategy, but it is very important for a bank to have a clear vision on this and an according strategy."
Making the most of resources
It's all about balance, according to Koggersboel. Banks now put a lot of their resources into compliancy, sometimes even 80 percent. "Understandable, but this is just keeping your head above water without doing anything extra for your customers. It should not distract you from focusing relentlessly on your customers. Make sure you keep the customers happy; they are not as loyal as they used to be."
Koggersboel: "Instead, you should look for partners who can help you and focus on where you can make a difference. In other words, use your resources to develop the new services that your customers need. Don’t waste to much of your resources on providing commodity services. So, collaborate, work together. Not only outside but also within your organization, think of your IT department for example. In the end, you have to take everyone on this journey with you."
- Industry insights