book cover bank 3.0

Banking is no longer a place you go, but something you do. This is the underlying argument in Brett King’s book, Bank 3.0 (an update to 2010’s Bank 2.0), which examines the widening gap between how customers choose and use financial services and the experience and services that traditional banks are providing them.

This disparity is largely a result of the radical changes in technology and consumer behavior that has occurred over the last two years. The proliferation of mobile and digital channels – including mobile wallets, digital payment platforms and social media – has created, what King refers to as, a “new class” of consumer who no longer assumes they need a traditional bank account. This has led to the rise of the “de-banked”: a growing constituency who have gotten rid of their bank accounts altogether in favor of prepaid credit cards, PayPal accounts and mobile payments.

“People are beginning to take a functional and utility view of banking,” King explained in a interview. Banks are now being judged on the ease and speed with which customers can find information, research and buy products, open and access accounts, conduct transactions and get service issues resolved – in short, how easy it is to do banking — when they need it and from whichever channel or device they prefer.

This is a critical paradigm shift, and one that all banks must pay careful attention to because it implies a fundamental change in the way they conduct and compete for business. This is as much a branding challenge as it is a technological or operational one. It’s no secret that financial services firms most often tout customer service as their point of differentiation. “We put our customers first,” “We are customer-focused,” “We provide superior customer service” are all common messages. And really, service is a table stake, a requirement for doing business. If people didn’t believe you provided good service, why would they do business with you? But this new world of banking is changing what service means to customers and how they expect it to be delivered.

Today, customers want convenience. They want banking to fit easily into their progressively mobile and digitally centered lives. This applies to business customers as much as retail. Does this mean the physical branch is no longer relevant? No. But it does mean that the in-branch experience may need to evolve. Banks need to give people new reasons to keep coming into the branch. Business training seminars, lectures from local thought leaders and community-focused events are examples of exclusive in-branch experiences that provide a uniquely valuable form of customer service.

What King is suggesting in Bank 3.0 is disruptive and controversial: banking is no longer a place you go, but something you do. The question all financial services marketers should be asking themselves is, if our service is what differentiates us, how are we providing that service in a digital world? How are we delivering on our fundamental brand promise in a digital world? How are we creating a unique experience for customers in and out of the physical branch? How are we making it easier and more convenient for them to do banking?

Bank marketers are charged with finding the right balance – creating a differentiated experience that leverages the power of mobile, social and web without sacrificing the ‘human touch’ that bricks and mortar networks provide. The solution will be different for every firm, but it does require taking a renewed look at what business and retail customers want from their bank. Research is critical to uncovering these insights. Some banks will determine they need to fundamentally reposition themselves to stay relevant in this new world of banking. For others, the story will stay the same, but their brand behaviors – how they deliver on their brand promise – will need to change. Ultimately, how banks react to this transformation – their ability to adapt – will determine who comes out ahead.

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