The Bankwatch

Tracking the consumer evolution of financial services

Building the Bank of the future: you can’t get there from here

I have been thinking about the three posts.  The things discussed seem to follow two threads, a consistent multi channel experience, and a higher value consistent multi channel experience.

Lets deal with the multi channel experience first.  I think its soon (maybe now) to be table stakes that Banks provide the ability to deal with the “old way” seamlessly.  The items there are not rocket science to understand, yet they are incredibly hard to accomplish for Banks.

Customer need Organisational group Technology
Stop payment on the lost cheque Branch or call centre DDA system
Get a new ATM card Branch DDA system or card system
Get a new credit card Credit Card call centre Credit card system
Change his address Branch or call centre DDA system or cif (customer information file)













The fascinating and frustrating part of these requests is that they are perfectly rational and normal customer needs.  Bank systems are product based.  Cards came along much later.  The resultant mish-mash was built long before web services were created.  They were also built before the proliferation of channels.  So it was ok to build multiple systems with unique front ends, because smart employees were the intermediary between customers and those systems.  Employees were the middleware of the 70’s and 80’s.

But since then we all know what happened.  Along came telephone banking, ATM’s, Internet banking, wireless banking, email, and with that proliferation came even more siloed technology because IT just wasn’t ready. 

So lets talk about the higher value multi channel experience.  My next hypothesis is that while IT gets itself ready for the consistent multi channel experience that we spoke of earlier, with web services and SOA, that its already too late.  The dot coms in Web 2.0 land have moved on to create capabilities that we can only dream of at Banks. They open their business with a blog.  Their primary channel is Internet.  Its assumed that customers will interact with the company web site, providing feedback, suggestions, and improvements.

The fundamental difference is that they are designing their firms based on customer requirements, and establishing host and product systems to fulfil those requirements.  Banks on the other hand have their legacy systems designed around products, and to align those with customers takes us back to the SOA problem.  

So its too late for Banks to talk about a consistent multi channel experience as the end game.  The bar has been raised.  The end game needs to be redefined:

The consistent customer experience we usually speak of is up the y-axis.  This axis in essence puts traditional branch services online, and extends them to services that either staff did before (e.g. financial planning) or new services that exist because of online, and computers (e.g. transaction search and categorisation).

The x-axis moving to the right is a new dimension for banks. Its quite possible many Banks won’t go there.  But they will not survive.  The shift in power from institutions over to consumers is already happening.  Verizon, Boeing, Microsoft, Wells Fargo, ING, HSBC, VanCity are institutions leading the charge to accept, adopt, immerse themselves in the x-axis.

Back to the three posts.  What gets in the way of moving Banks into the new space?.  There are three categories that require addressing. 


Bank CEO’s need to get with the programme.  Richard M. Kovacevich, chairman and CEO of Wells Fargo gets it.  He made Internet Banking, and the new customer experience a priority.  ING made it a priority.  These are changes that have to come from the CEO.

Without this drive from the top, I will be honest that its a hard sell, and you will only be able to accomplish a certain amount, and hope to influence the CEO.

Technology strategy

Whatever happens, the Banks technology group must prepare their strategy for the consistent multi channel future, and build each project with that strategy in mind.  This includes getting over legal, and information security issues.


This is the tricky part.  If its not affordable then you have to go back to the Policy and Technology Strategy.  This is where most banks are.  The requirement to address quarterly performance targets gets in the way of strategic investment.  However the move to the right along the x-axis is not expensive.  It is a primarily a policy matter, so affordability is an excuse.


Written by Colin Henderson

October 16, 2006 at 00:44

7 Responses

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  1. […] If this is true, and I believe it is, then we must address the emotional connection online if we are to be successful in retaining loyal customers online, and providing a viable alternative.  Meantime branches remain essential. […]

  2. […] This is timely with our discussion about Building the Bank of the Future.  In my poor attempt at a picture (I need help Tara), the point is that Banks cannot make it by restricting online acidity to automation of Branch transactions.  This does not deal with the emotional side of the customer relationship equation. […]

  3. […] Previous references in this blog, when in this Bank of the Future post. […]

  4. […] here is the email interview we did, and I relate this to my earlier post on Bank of the Future. This week, hundreds of financial services executives from all over the world will gather in […]

  5. […] 5th, 2007 · No Comments Last October 06, I tried what in retrospect was a rather poor attempt to consider the Bank of the Future, after considering the impacts of Web 2.0. It was poor, in the […]

  6. Thanks boys58deeb41c1b303680b58c9d491bd93d3

    Yhanks you

    February 1, 2008 at 02:27

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