Top-line growth for banks by using innovation
Top-line growth for banks by using innovation

Top-line growth for banks by using innovation

These are some of my ideas as take-aways from the Banking conference:
Take Away 1: “Cost saving is not a strategy” as some banks might think. You can only have a “top line growth” based strategy. This means that you use innovation to drive more relevant and competitive financial services across the portfolio. It might also require a rethink of your customer profile.

Take Away 2: Tracey’s model on Value Discipline’s got me thinking that industries have moved on since this model was created. The three dimensions used in his model are: Product Leadership, Customer Intimacy, Operational Excellence.
You have no choice these days but to be good at all of these dimensions. This is a strategic question: can mass market retail banks be customer intimate? Can private banks be operational efficient?

Take Away 3: “Life stage” based banking is still a challenge by understanding your life stage as student, married, married with children, divorced, etc in segmenting markets. Another model used in “Life style” based assessment is where you try and understand the markets financial status.

Take Away 4: You can’t learn from Europe and the US as the population spread in age, growth and wealth is fundamentally different to Africa, South America and Asia. Looking over the last 1000 years the use of money has shifted and acts of value sharing has shifted aggressively from the 1500 onwards. The Black Death outbreaks of the 1400’s got the populations to decrease across Europe and wage rates increase as skilled labour was in short supply. Moving ahead to today: are the children of today using the money systems designed in the past? E-mailing money, sending money via cellphones, getting cash from automated teller machines without a bank card and only access to a mobile phone.

Take Away 5: Can banks provide financial management dashboards to their clients to manage three major components; what to grow (assets, etc), what to shrink (credit card, car finance, etc), and cash flow. The bank can then analyse these results and start doing fine grained segmentation to understand the ways in which people use money.

Take Away 6: Islamic banking in the US is now called “moral and ethical banking” as there is a move by markets to wanting more transparency in banking services.

Take Away 7: The “can-do banks” have moved their problem solving philosophies from western to eastern models. This means that you try and solve problems by getting the group together and finding the root of the issue instead of finding the guilty party and penalizing them. Can this be used by the client facing people in a bank?

Take Away 8: A new agenda for top-line growth: focus on value for customers, clarity by understanding your customers, revenues in the different clients, profit focus, strategic thinking and execution.

Take Away 9: “A skill bankers need to develop is how to use technology” was a great statement made in response to how banks can become more competitive by using innovation.

Take Away 10: I’m not sure if I believe Jo’s sentiment as we’ve seen value in networking way beyond the financial transaction: “I see that there is no value in social networking” (by Joseph DiVanna) and no immediate conversion of value because people only use their networks for: Trying to obtaining great investment ideas from me, try to sell a product to me, people trying to get introduced to people in my network, or generally someone that wastes your time.

Check out some of these interesting innovative organizations:
Dubai Bank customers start by depositing E10million to start.
Aboriginal Banking at Bank of Montreal follow customers around by using GRS tracking for those that move around.
Exim Bank in Tanzania focuses on women in jobs and those at home.
First Women Bank in Pakistan focuses on women entrepreneurs. There is a network of women working together to do business.
AKBANK for technocrats and under 30 movers and shakers.
Capital One Card Lab where customers design their own credit cards.
Ingenico with innovative payment solutions.