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Don’t get too comfortable

by robfindlay on 26. Oct, 2010 in customer experience, strategy

Wow its been a couple of months since my last post, due to expanding family. Its been a low lying period of just getting by! But we’re out of the fog now, and already the end of the year isn’t far away is it!?

I’ve recently had an interesting industry lunch hosted by FST and HP, and was prompted and poked by Mel, an HPer to get blogging. So Mel, thanks for the prompt. Here goes.

One of her colleagues was telling me how he’s noticed a range in maturity across various banks in Asia at their current appetite and capability when it comes to adopting new technology, business models, customer experiences.

We discussed at length, and I appreciated the HP expertise on this.

There are a couple of conclusions here for me based on this idea of varying maturity.

The definition of terms

Let’s first look at what the opposite of varying maturity looks like. If all participants in an industry are equally mature, they can be all poor, all average or all good (or god forbid even all great!). If all participants display a variety in quality and excellence, then they have varying maturity.

A highly equal maturity industry is one where all participants are equally capable. A low equal maturity model is where there is great variance in the offerings or capabilities of the participants in one industry.

A high performance industry is one where all participants perform at a high level most of the time. A low performance industry is one where all the participants perform at varying or low levels of quality.

Whats a high maturity and high performance industry look like?

There are certain industries that have a generally high performance rate amongst the participants – these industries that demand high performance often come with strong demand in quantity and quality from their customers. The consumer technology market may be one, where the volume and incermental innovation and improvement is at such a rate, that the benchmark is being set by the next guy within days or weeks, not years or decades.

Whats a low maturity and low performance industry look like?

There are certain industries that do not have the raging demand from customers, or need to truly innovate, and can surive amongst their peers by offering an average experience, or even varying wildly from the norm. This leads to varying performance, and sometimes low performance at least in customer experience delivery. But strangely, this often comes with no less performance on the P&L statement. Only in banking, where fees and margins are the main revenue source, can customer experience be so low on the list of creating value.

Of course we know this is fast becoming a thing of the past.

One of the really powerful things about the potentially fatal commodisation of an industry is that it drives crazy areas of differentiation. And in banking we cant differentiate through a cool new feature like a digital camera can (when was the last really interesting product that came from a bank?), or through a new interesting branch layout – this only affects a few people.

Banks need wholesale high maturity and high performance in all parts of their customer service and experience value chains – in non-jargon jibberish, we need to be obsessed with how the customer has to deal with us, and always look to deliver the best, seamless and appropriate experience we can.

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From Online To Digital – Part 2

by robfindlay on 26. Jul, 2010 in innovation, internet banking, strategy

The following article I wrote for FINSIA’s InFinance magazine (June 2010) accompanies the presentation I gave here. Again the writings here are my own opinion based on light desktop research. If you want proper journalism, go here or here!

‘The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.’

Rupert Murdoch made this comment in February 2008 about the future of the newspaper business.

This view of the future applies to all industries, particularly those with large and small players, with old and new organisations, and with the threat of disintermediation and business model disruption on the immediate horizon.

The newspaper business is currently feeling this pain; travel and real estate are facing irrevocable change within their industries; and banking will be next.

Innovation is one of the ways we can counter or even capitalise on this event horizon.

How customers manage their money

A customer might log on via the internet to: view their account balances; make payments and transfer funds via an iPhone app; pay a friend back for a lunch debt by bumping phones together; or find an ATM on the way to lunch using augmented reality; then video chat to a call centre agent via Skye regarding their financial advice needs; or discuss these needs in person with a retail representative using a collaborative touch screen table; and share this information later with friends that have similar needs.

All of this can be done today using existing online and digital technology. And not one of these tasks needs to be facilitated by a traditional bank brand as we know it. A collection of offerings from brands such as Mint.com, Apple iPhone, Skype, Facebook and PayPal can replicate the banking function, and even the relationship, as we used to know it. This is part of the new future that large financial services organisations must prepare for.

A perfect storm has emerged …

So why is this upon us? And what is happening that is making this change occur at such breadth and pace? A perfect storm has formed on a range of fronts:

  • Economic conditions were drastically shunted. In a post-GFC economic environment, business models have been stretched and tested. While Australia’s banks and financial institutions have fared relatively well through the global financial crisis, the Australian market has not been totally unaffected, and pressures on wholesale funding remain an ongoing issue.
  • Consumer behaviour changed irrevocably. After 10 to 15 years of economic prosperity, consumers have become far more comfortable with certain kinds of debt instruments and they are now able to make purchase and service decisions much quicker, and with greater knowledge and understanding.
  • Technology capability embedded itself in our lives. Information technology is ubiquitous, with people’s lives seemingly busier than ever amidst the promise and presence of technology designed to make life simpler and more efficient.
  • Changing business models now compete alongside traditional models. This new access to consumption and technology has created new industries and supply chains that deliver products and services to consumers.
    … with lasting consequences
  • Trust and security are now highly valued. Large banks and financial services have some advantages here, but they need to convince customers through actions rather than words.
  • Customers have greater access to products/services and more knowledgeable about their options.
  • Control of the conversation is now shared between the consumer and the organisation. Consumers can now have conversations with other consumers more easily than with large corporations like banks.
  • The preferred channel for certain tasks is becoming clearer, with online and digital channels widely preferred for simpler tasks, and face-to-face or voice-to-voice channels preferred for more complex tasks, such as sales conversations or problem resolution.
  • Digital interfaces are evolving from a graphical user interface (GUI) (click a link using a mouse on a PC browser) to a natural user interface (NUI) (touch a button using your finger or hands on a mobile device).
  • The proliferation of offerings from hardware and software providers such as Apple, Google, Microsoft and Nokia means we must evolve digital interactions from website development to multiple platform display and support.
  • Peer-to-peer lending as provided by brands like Zopa means anyone can provide the financial offering of a bank.
  • Disintermediation is a reality unless a strong focus on customer centric servicing and adoption of new technologies is established.

Incremental innovation must be accompanied by seismic shifts

There are essentially three key components of creating an innovation response to the new paradigm:

  • establish an innovation culture and process;
  • create strategic innovation awareness and change; and
  • move fast on the tactical dimensions of online innovation.

Rather than a scatter gun or an ad hoc approach to innovation, an innovation culture needs to be created.

In this environment: people become aware of and open to the idea of lateral thinking; a flow of innovative thinking, ideas and practices is generated; processes are developed to enable this flow of ideas to flourish until they are proven; and a method of measurement will be required to analyse the quality, performance and ultimately the return on investment associated with new ideas.

In his excellent book Innovation and the Future Proof Bank, James Gardner, former head of innovation at Lloyd’s TSB, describes five strategic dimensions of business innovation, each with varying levels of potential disruption:

  • new business models (PayPal can be described as a disruptive model, Zopa even more so);
  • new channel capabilities (mobile is the predicted boom area);
  • new markets (e.g. gen Y and the emerging markets in Asia);
  • new experiences (better processes such as a mortgage application process); and
  • new product forms or evolutions (the credit card was perhaps the last real product innovation).

These are the dimensions in which innovation can enable your business to make a seismic shift towards the future, or be obliterated by an unforeseen threat.

On a smaller level, for those digital and online channel managers under the channel strategic dimension, there are tactical online innovations that can be made. Current trends in this space include mobile and wireless ideas, security and biometric innovation, user-generated content and social media, the simplification and improvement of the user interface, and the massive area of micro, contactless and other payments innovations.

Regardless of your approach, simply keeping your hand on the rudder and steering forward in a straight line may not give you the edge against competitors. The level of innovation that your business needs to stay ahead of the competition may be something as small as a specific channel idea, or an entire business model change.

But, standing still is not an option.

Sidebar content:

10 insights on digital innovation in financial services

  • Digital technology is already here.
  • Digital is the ultimate scalable environment.
  • Mobile services will boom in all forms.
  • The role of physical outlets will not diminish, but will change forever.
  • A multi-channel mix is unavoidable.
  • Your brand needs to be anywhere, anytime on any device.
  • The power is in the cross-integration.
  • Good user experience and design are critical differentiators.
  • Customers are more in control now than ever – don’t waste that opportunity.
  • It’s not just about online and social networks, it’s about digital connections and relationships.

Quick thanks: To Brett King for opening this part of my brain. Buy his book!

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The 10 roles of the Change Agent

by robfindlay on 06. Jun, 2010 in innovation, strategy

So, you feel like an odd one out. You wonder why no one in the room can see the blinding obvious. What we should all be doing. But its the standard politics, or lack of accountability that seems to be stunting your organisations ability to head in the RIGHT direction (or the right one as you see it!) as opposed to the same old trodden path, which as we all know, will lead to the looming demise of many businesses and industries.

1. The Dreamer
You’ll need to think of quite illiogical possibilities, of seemingly odd pairings of ideas, of ideallic future states for the business that will require drastic transformation, yet seem impossible to ignore or aim for. You’ll need to articulate these visions in ways that non-change agents can understand, and sell the future, and the first step towards it.

2. The Strategist
You’ll need to formulate a way to get the right movement forward to align with the objectives of interested parties – like management, shareholders, etc. You’ll need to create both incremental change that adds to a large amount, or introduce ground breaking change that is too compelling to ignore.

3. The Agitator
You’ll need to be prepared to take a different view to those in the room, to put the mirror of the real world up to the face of the business, and show whats really going on. You’ll need to bring some harsh and simple reality to the table, and fight to get this heard. This may not prove popular. But not many change agents are, and rarely survive long.

4. The Networker
You’ll need a strong network across the business to simply survive, let alone thrive. But you’ll also need to use the network to get some of the less formal or traditional initiatives potentially happen. A seemingly random collection of people from across a business, sometimes called a multi-functional team, can achieve odd results when doing things ‘under the radar’

5. The Connector
You’ll be in a rare position that your new network will make you vital in creating connections across the business. When you hear about project A relates to topic Z, and so does project B, you connect the people together and become a key link in reducing double up in the business.

6. The Influencer
You’ll realise that agitation doesn’t always work, but given its your natural instinct to do so, its hard to play the game. Influencing others to make a positive change of direction will become a skill you’ll need to garner funds, resources, approval, etc.

7. The Designer
You’ll need to appreciate the finer craft of delivery, and of customer and user experience, as this will prove the difference in uptake in your ideas. A new idea packaged in a better way than others can manage means a better chance of success – just ask Apple about their iPod.

8. The Journalist
You’ll need the curiosity of the journalist – about every topic, in every field, in any time – as others will throw all manner of logic to rebutt your ideas. You’ll also find that this wide understanding of the world feeds your creative mind, and creates left-field thinking. And just like a journalist you’ll need excellent communication and writing skills!

9. The Project Manager
You’ll need to be very organised to get ideas flowing through, and people in line to assist you. You’ll need to show the business that you can create structure where they thought structure couldn’t exist.

10. The Deliver-er-er
You’ll need to produce the goods, deliver to market, and create customer response. This can take time, often means short term flame and pain, but in the long term must align to a change strategy.

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Own the process, share the outcome

by robfindlay on 30. Apr, 2010 in strategy

A colleague and I were taking the 10000th person through our project process and progress, and we were trying to articulate our stakeholder engagement philosophy, when it occurred to me why it had gone so well to date.

Normally, a project like the large online project we ran usually ends up with the standard ‘design by committee’ outcome, or struggles to avoid it but somehow can’t avoid it. What we’ve managed to do with this project is engage dozens of people, help them understand the change we’re undertaking, and let them leave the briefing feeling like they’re across the process, and even support the decisions we’ve made and give ongoing support.

So we’ve been able to own the process yet share the outcome.

Controlling the way the project is run is different to allowing all to understand and support this control, and even be involved in the decision making process. This has been a unique benefit that you should strive for in your project – it creates an efficient and focussed outcome.

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Does size really matter?

by robfindlay on 22. Feb, 2010 in mobile, strategy

As you can imagine, I’ve been at it for days. I’ve been researching, comparing and fact checking. I’ve been verifying with sources, consulting experts and listening to futurists.

Just joking.

Again, your instincts are right. The Bank Channel is not a source of journalistic accuracy. More a series of random thoughts plotted on professional looking diagrams. Like this one:

 
Here it is. My Screen size vs Capability Matrix. I made a recent trip up to Sin City to see a few of the devices you see here. And I thought of this basic way to plot the myriad of devices that are coming along. 

This is by no means the only way, nor is every device on here, nor are they particularly accurate or to scale. This is of course not the point. Creating some sort of a landscape against which we can comprehend the world of devices now available and soon to be available is important, as it can give you some direction from which to understand their use and prioritise your attention to them.

I have here a couple of axes:

On the left, there is capability / innovation. This axis simply talks about the increasing capability in devices that previously were relatively simple, or play a cheaper, less notable role.

On the bottom axis, there is screen size. Despite the ability to do anytihng, I see screen size as being a critical factor in limiting certain devices in their capability compared to their bigger cousins. 

But this chart is relative, and so the iphone is an incredibly capable device for its size compared to a digital photo frame, rather than to a full PC unit.

Another axis, perhaps on a third dimension, would be DOS>click>touch>multi-touch. But thats a bit too controversial at the moment.

The green highlight shows for me where the leaders are (and in the case of TV always have been). This is where the boundary is constantly being pushed, and the capability grows dramatically.

Its about the appropriate capability for the appropriate device.

All you have to do, is decide which goes with which.

Just a thought. Comments?

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How is your bank positioned for 2010?

by robfindlay on 04. Jan, 2010 in strategy

Happy new year to you all – there is certainly a positive feeling about 2010 that means we’ll all be busy throughout the year.

The industry seems both well placed and at the same time under threat – slow moving large organisations must learn to be nimble, and quick to respond in the face of drastic change from non-banks, direct offerings, heck anyone with an idea, a PC and an internet connection.

My personal goals include a leap forward for innovation and direct interactions for my bank, and hopefully you’ll see some exciting things to come from NAB and our peers and friends in other banks. Australian banks have weathered the storm well, and the fight is on now to create a compelling suite of direct and other channel offerings. Let me know when you and your bank have something ready to launch and we can share it on The Bank Channel.

But back to my post.

It’s perhaps a strange coincidence that 2010 is in Chinese Horoscopes the year of the Tiger, and more particularly the year of the element metal. The Tigers rapid growth continues through the application of Metal sees our Australian economy (and the wallets of Andrew Forrest and others at BHP, Rio) continue to stabilise and steady due to export of iron ore and other materials.

But this year will also see major challenges to banks and other traditional organisations as new communication and business models embed themselves in our lives, and have exited their embryonic status from their time on the 2000′s.

Personally, I see an exciting time ahead for those banks who have the following attributes:

  • Genuine leadership support for innovation – and I dont mean innovation in the current, fluffy vague sense – I mean innovation that produces new ways of creating revenue, customer relationships and cost reduction
  • Genuine intent from projects to create integrated and seamless outcomes
  • Genuine messages and brand articulation – make your advertising and communication mean something

Will your bank be a hunter, and aggressively embrace this new way of communicating and doing business, or will it be hunted, and sit back waiting to be consumed?

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