So Virgin Money are having a showcase week following their acquisition of the ‘good’ Northern Rock.
I am personally very excited about
a) Virgin Money’s ‘full’ entrance to the market
b) The next 5 years of the UK Banking sector
Virgin have been hankering after the opportunity to transform this industry for a long time now and they stand a very good chance of being able to do so… but they are not the only change shifters around and they are not ‘automatically’ going to be THE people to change the industry necessarily!
What IS wrong with UK Banking?
When bankers or those in the industry survey customers about their opinions about banking we get answers back about interest rates, charges and fat-cats.
What we don’t get is what are people trying to do with their money (that means they want better interest rates), how are people managing their money (such that they incur charges) and what do people understand about the banking industry such that they perceive ‘Fat Cats’ as being unfairly paid…
The banking industry is just generally not used to being customer-centred in it’s thinking. It has never had to be.
Well that is certainly changing now. Rightly or wrongly the banking crisis has made us all say “Enough is enough… something has to change” and there are now new entrants to the industry who are clamouring to offer us alternatives in an industry numbed by sameness.
When I look at the new entrants the ones that excite me are the ones that I know are thinking about us as human beings (and yes consumers), our lives and what we want to achieve ‘through’ banking – as opposed to those who are just thinking ‘what is a better banking product’ or ‘what does mobile banking mean for a customer’.
The lens of change has to be wider than this.
My pick of ones to watch… and why some obvious names don’t make the list
- [my out on a limb prediction] – Royal Bank of Scotland
- [the favourite but with caveats] – Virgin Money
- [The Industry Usurpers] – Apple/Amazon/Paypal
- [The Surprising Innovator] – Standard Chartered
- [The disrupter] – Yodlee
Who didn’t make the list
- Aggregators/Online ‘layers’ – Bank Simple/Moneydashboard/Mint
- The incumbants – The other high-street banks
So why is the perpetrator (as defined by the red-tops) top of my list? Not just because the only way is up but because
- The new starts are struggling with actually implementing the technology behind a bank. Don’t expect current accounts or mortgages from Tesco Bank anytime soon the FSA is far too busy scrutinising them on why they couldn’t robustly deliver Savings and Credit Cards [their core business]Virgin Money remain on the list because they have at least acquired a fully working bank but they may still have serious integration challenges (based on the same technology Tesco Bank is struggling with)
- The incumbants have already got a fully working bank system, are experienced at delivering change into it and rolling that out to their staff.Their challenge is a cultural and organisational one – their key change they need to make is to decide to be more customer centred and do everything they already know how to do – but with THAT focus. They COULD move very quickly and deliver to their already hefty market share a great experience.
The disruptors may well be the ones that kick one or two of the incumbants into action (the jungle drums of customer experience suggest this is happening within at least three major UK retail banks)
There are so many ways to cut your predictions – and I may well change my mind in a years time – there is one thing that for me remains absolute though. The winner will be one who works out what it really means to be customer-led from the inside-out, who can demonstrate a genuine sense of connection and understanding with their customers.