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  • What the bank wants?

    The big banks used to give the impression that they wanted to do as little as possible for their retail customers. With a limited range of ‘own brand’ products and restricted access to managers, what little interaction there was between the institution and its customers could be impersonal and one sided. In effect, the banks were failing to comprehend their customers’ needs and as a result, lost touch with them. Something had to give—and it did.

    Or what the customer wants?

    The new breed of banks (AKA ‘challengers’) are ready, able and more than willing to understand their customers’ motives and satisfy their requirements than the old guard. Using behavioural analysis and insights, digitally-enabled banks can deliver the on demand services their customers expect. Digital banking apps for example, enable customers to aggregate and optimise their financial resources in real time. And as customers gain more confidence in the service, the bank steadily gains the customer’s trust—one of the most valuable outcomes of any relationship.

    It’s easy

    By delivering the right offer, to the right customer, at the right time, the new banks will be positioned to provide more than banking services. Capitalising on the speed and expediency of transacting via an app, many of the digital-only banks will be helping their customers source other financial products. Insurances, mortgages, pensions and of course, investments will all be purchased via open banking platforms—providing the potential product or service provider is up to the digital mark.

    Customers will expect to see in a wealth manager, the same customer-centric benefits as they see in their digital banking platform—i.e., agility, transparency, flexibility, efficiency and convenience.

    The challenger bank—your new intermediary?

    Based on the foregoing, it’s likely that the new banks will be poaching business from intermediaries and wealth managers. For forward-thinking firms, that development can be viewed as an opportunity rather than a threat. Worthwhile new business channels are few and far between: would it be in your interests to start developing relationships with the banking newcomers? Although the typical digital bank customer may be not as well-heeled as you would like, given the limitations and widespread disenchantment with traditional banking offerings, it can’t be too long before the challengers start attracting the more affluent customer.

    Your type of client, perhaps?

    Ed Lopez – Chief Revenue Officer – JHC