New technologies and the big banks

Consumer behaviour is changing.

This is largely due to the many technological innovations which take place at an incredible speed. Quick and easy are now the two key words for every consumer oriented organization and this is driven by new technology.

Every organization must integrate new technology as quickly as possible in their business processes to keep their customers happy.

Unfortunately any competitive advantage is short-lived because of new innovations. Every organization needs to get on the treadmill of ever changing technology.

If you lack behind, you’ll fail.

This is also very true for banks. Banks realise they need to quickly adopt and use the new technologies that become available to keep their customers happy. However they have two problems:

Firstly, technological changes are very costly and complex for banks. The bigger the organization, the more costly and complex the changes.

Secondly, banks have to deal with regulatory issues. This was mentioned in an article today in the Sydney Morning Herald by Australian chief executive of ANZ, Phil Chronican. In the article ‘ANZ’s Digital Disruption‘ he is quoted as saying:

Having to sign a mortgage agreement with a pen was a sign Australia’s banking laws had failed to keep pace with consumer demand for digital innovation.

In other words the banking laws have not yet adapted to the new technological era. Chronican made these comments ahead of a presentation to the Committee for Economic Development of Australia in Melbourne on 14 August.

As an example he mentions the creation of a standard for mortgage registration and land title transfer. The current legislation still requires mortgages to be signed in person, despite the fact that identity checks and credit assessment being done online.

In the article Chronican also says:

Banks will look clunky unless our customers have a similar feel, and frictionless experiences, with us as they do elsewhere.

This is so refreshing coming from a banker!

I wish him all the best on his endeavour to become truly customer focussed. I still feel the big banks are too much driven by making profits (look at CBA’s result today!) instead of improving customer experience. This article shows that the big banks realize they need to adapt or else customers indeed go elsewhere.

As always I’d love to hear your thoughts on this topic.