Innovation in Banking: Start with the Heart
A colleague of mine, Josh Berndt, and I recently attended two key banking industry events. We both went to ABA in Denver and then Josh braved the bright lights and bling of Vegas on his own to attend BAI’s annual tradeshow. For the second year running, innovation was the dominant topic across both events for banking institutions of all shapes sizes. Not unlike big data, innovation seems to be the enigma that everyone is wrestling with to keep up, get ahead, and go new places.
The exponential speed of technology, a dynamic regulatory environment, and the growing power of consumers to bank where and how they want continue to define an industry in major transition. This is further complicated by new, agile competitors coming to market with non-traditional models capitalizing, at least in part, on millennial’s attitudes toward technology and finance.
The Millennial Maelstrom
According to a recent article from Forbes there are eighty million millennials in America alone and they represent about a fourth of the entire population, with $200 billion in annual buying power. And at the heart of their buying power is the banking system. As such, there are three key insights that stand out when you look at the Millennial Disruption Index, which tracks the attitudes and behaviors of this influential segment:
- 53% don’t think their bank offers anything different from other banks
- 71% would rather go to the dentist than listen to what banks are saying
- 68% say that in 5 years, the way we access our money will be totally different than today
The Rise of the Chief Experience Officer in Banking
This is where brand experience comes into play…and can change the game. Brand experience is about thinking further about your entire brand ecosystem. Every touch point in your organization is an opportunity to produce outcomes that are not just innovative but that differentiate and reframe the collective experience for everyone involved – employees, customer, and prospects alike.
According to the Consumer Financial Protection Bureau, banks spent $5.5 billion on “awareness advertising” in 2014. However, when you look at advertising campaigns within the banking industry over the last three decades, very few stick. Ally Financial’s “Straightforward” campaign back when the industry was in turmoil is one of the few that broke out at a time when consumers mistrust of banks was at an all time high. Beyond the communications, it was their focus on delivering a new kind of experience that has propelled them to be recognized by Management Consultancy BCG as the only bank brand with the ability to forge an emotional connection with consumers. For everyone else, all of that investment in advertising campaigns dissipated quickly– a moment in time flash in the pan– a thing to address the next problem.
Investing in brand experience allows you to transcend time. It’s about uncovering the essence of who you are, why you do what you do, what uniquely defines your culture, and what this means to your audience…including millennials. Following are the three key things to keep in mind as you strategically define brand experience for your organization:
- Values provide guidance, behaviors influence action. Investigate and discover the behaviors required to innovate within your organization.
- Innovation teams should not live in siloes; it should be a corporate-wide initiative. It has to live in the DNA of your organization – it should be true to who you are and to the audiences you want to connect with.
- Brand advertising should be a unique expression of your culture of innovation; but first you need to do the hard work of defining the desired brand experience.
As Rob Nichols, the incoming President and CEO of ABA says in his thank you video to this year’s conference attendees, “…as you know, our industry is rapidly changing and as a marketer you are on the front lines of driving innovation and improving the customer experience.” Just make sure that as you go into battle, you start at the heart of innovation – your culture and the resulting brand experience. This is the formula for sustained innovation.
This article is part of a series on #OldBanking. It symbolizes the paradigm shift in the banking industry from the traditional transactional model of retail delivery to a customer-centric model focused on creating experiences and fostering relationships. Join the conversation by using #OldBanking on Twitter.
Learn more about how we are driving innovation for some of the biggest brands in the banking industry.
Luke Bemis is a Senior Strategy Director at Monigle. He has more than 25 years of experience, turning ideas into reality and making reality a better idea.
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