Other parts of this series:
- How banks can win by finding the “zero moment of truth”
- Can banks build relationships by appealing to unique customers?
- How to build a banking ecosystem
- I’m curious to see which of these ecosystem solutions you think is best
- How banks can engage with Google and Facebook without giving up their customer relationships
The South African banking sector is moving quite quickly at the moment. I’ve written elsewhere about the ecosystem strategies that local players are adopting.
In the light of this, I’d like to share some thoughts I had after reading this piece of research: Maximizing Revenue Growth in Retail Banking.
I’ve spoken before about how banks know all about us, and are therefore in the perfect position to offer us what we need, exactly when we need it. We call that “hyper-relevance.” And I’ve also spoken about the importance of maintaining and building trustworthiness in the eyes of the bank’s customers.
What caught my eye in this research ties into the blog post in which I spoke about Nedbank’s Avo ecosystem.
A bank-controlled ecosystem merges its customer journeys with those of other providers.
The obvious ones are the buying of cars and houses.
For cars, the customer journey of buying the car is integrated into the customer journey of applying for the finance. The finance happens on the dealership floor, not at the bank.
For houses, the customer journey of getting a bond is merged with the customer journey of players such as lawyers, conveyancers and real-estate agents. In both cases, the bank is connecting different players around a single transaction.
This is one way of looking at an ecosystem.
But banks can go slightly deeper, beyond the transaction. Why is the banking customer buying the house in the first place? It’s often to do with a “life moment.”
Maybe there’s a baby on the way. That’s a life moment that touches lots of role players: doctors, radiologists, hospitals, baby-goods retailers, schools—even lawyers to update the parents’ last will and testaments. Can a bank profitably identify the life moment, and build an ecosystem around it?
Or perhaps the consumer is buying a house to add to their growing portfolio of buy-to-rent properties. This requires an ecosystem of architects and town planners and building contractors and insurance companies and rental agents and lawyers specializing in that field. Can banks profitably create an ecosystem to facilitate relationships in this area?
Or perhaps the transaction is as a result of immigration, which is another kind of ‘life moment.’ Immigrants need a different ecosystem again, this time focused moving bank accounts and health insurance and pension funds between countries, not to mention tax attorneys and moving companies.
There are two ways in which banks can think about being ecosystem partners. One is to focus on a particular kind of banking customer, such as farmers or SMEs.
Another is to identify a “life moment” and expand the ecosystem around that moment.
Both require the hyper-relevance I spoke about two blogs ago; and the trust that their bank wants to do the right thing, that I spoke about in my last blog.