Published on: March 21, 2014by Kevin Coupe
The American Banker has a story about the recent Retail Banking 2014 conference, at which "top bank executives repeatedly invoked Amazon's name as an example of what they aspire to become."
That's right. Amazon.
Specifically, the executives seem enamored with Amazon's use of customer data and ability to create a positive customer experience. (This appears to be before it raised its annual Prime membership fee from $79 to $99.)
According to the story, "Banks are slowly improving the technology they offer, but they are still struggling to figure out how best to use the massive amounts of data that they have on their customers. Meanwhile, competition is fierce, low interest rates are squeezing the profits they can make from those customers, and most banks don't know how to get more business from people who, after all, only need a limited number of checking accounts or mortgages."
For bankers, the story says, the notion of finding or creating algorithms that will help them understand when people are ready to buy and what they are interested in buying is akin to finding the promised land - it simply is not being done to any significant degree within the banking industry. And so they are looking to the "Amazon model" for inspiration.
Now, let's put aside for a moment the sense that many people have that banks' problem is not being unable to know when and what people are interested in buying, but rather selling too much stuff that nobody understands, that once sent and again could send the nation into an economic tailspin, while simultaneously rewarding the industry's senior executives with sums of money beyond the dreams of avarice. (Whew. Glad I got that out of my system.)
The comments by the bankers seem very similar to those that might be made by executives in virtually any industry - to succeed in the modern economy, it is critical to know who your customer is, what the customers' wants and needs are, and then interact with the customer in a way that is both relevant and appropriate.
To do less is to run the risk of obsolescence.
it is an Eye-Opener.
- KC's View: