Monday 16 July 2012

Breaking the Rules in Supermarket Banking

The succession of own-goals by the traditional Big Four banks and daily revelations of fresh abuses of trust, have provided unprecedented opportunities for supermarket banks to grow market share in financial services...
However, keeping that share will depend on breaking the following self-destruct rules established by traditional providers:
  • Hook ‘em in and ‘abandon’ them within the mix: great introductory deals for new customer and then revert to uncompetitive terms
  • Exploit habit: Most people assume that their salaries will automatically appear in their bank accounts, direct debits will be paid on time and they can withdraw their own money from a cashpoint as required
  • Inertia optimisation: make every move complicated in order to reinforce a perception of being held captive
  • Establish standards-in-common with rivals to ensure a move elsewhere is not worth the trouble (collusion? See LIBOR)
  • Avoid the personal touch via use of retro-IT automation, all geared to re-inforce the above
  • Reduce comparability of offerings and exploit the customer’s numerical dyslexia
  • Establish performance reward-mechanisms that operate out-of-phase with actual results
  • Ignore the threat of efficient online everything
  • Target the un-savvy consumer, forgetting  that all consumers are savvy, given the right help and encouragement
  • Forget the basics, focus on cross-selling before establishing and deserving trust…
  • Remember the customer is never right…
But what if the above rules are a pre-requisite of successful (i.e. profitable ) high street banking?
In other words, perhaps a whole new business model is required using customer-centric operations, dedicated to meeting shopper-needs and transparent, defensible and competitive prices, where proof of repeat business, in retrospect, becomes the only basis for reward of all stakeholders…
In which case supermarkets start with most of the aces already in their hands…

1 comment:

Eysink Smeets said...

Let's agree that even those great consumer-oriented supermarkets don't do everything well. Here are some of the most stupid & smart things that might make supermarket banking great:

Eysink Smeets