Banks have a lot of data about accounts, but what does a balance really say about a person's life? Listening is key to understanding what your customers & employees are facing.
I have been in a little bit of shock since I found out earlier this week on Instagram that Heather Armstrong had died. I was a reader of her blog, long before someone coined the term “mommy blogger.” I was also a blogger. During the heyday of blogging, I wrote pieces for a group blog that was written by mothers. We wrote all kinds of stories about parenting, our kids, our partners. I wrote anonymously because my employer at the time had a policy. And, as much as I wanted to write and publish, I also wanted to remain anonymous. Why? Because my blog posts were about personal topics - parenting, marriage, my life. I had a public, professional life that did not intersect with my personal life. In fact, most of my co-workers knew nothing of my private life and I knew next to nothing about theirs.
After I left that employer, I knew I could no longer maintain that severe boundary. I was tired of it. For almost all of my life at that employer, I was a single mother who had to travel for work. Some years I put in 50-100,000 miles of travel. No one really understood or asked what this work travel required from me. I never spoke about it because I understood sharing that information would not be good for my career. Before I could agree to any trip, I had to make sure my sitter was available on those days. Once, I had to cancel a trip because my sitter had to have emergency surgery. I paid her to pick my kids up at afterschool care, make them dinner, make sure they did homework, got them to sleep and then stay overnight with them and get them back on buses to school the next day. I also prepared days of dinners in advance, stocked the refrigerator so that the sitter didn’t have to worry about grocery shopping. I maintained a 7 page document of instructions, including who to call if a pipe burst. I was incredibly lucky to find great sitters who I could trust while I flew thousands of miles away to talk about emerging banking technologies in India, Dubai, Israel, Switzerland. All of that came crashing down when my kids’ father died. I couldn’t leave them alone, of course, and I wouldn’t. There is no timeline for grief, especially that of children and it’s never linear. None of us were the same afterwards. We couldn’t go back to the same way of my working and traveling.
When I sat at my laptop and started writing this newsletter 3 years ago, I made the conscious decision to chip away at the wall between those lives. I was tired of trying to keep these 2 lives separate. From my first newsletter I started to break through those boundaries. I introduced a framework, hidden tribes, that I picked up while I read a book on US politics. By introducing the connection of my analysis to this book, I was also telling you stuff about myself – which books I read, authors I read, some of my political beliefs. In other issues, I’ve told you about my daughter, my son, my basement and my contractor who fixes stuff in my house.
That’s I’ve been able to write this essay and all the others is part of Heather Armstrong’s legacy. As I’ve been thinking about how her writing impacted me and this newsletter, I’ve also been thinking, of course, what does all this mean for banking, customers and vendors? This is, after all, a medium for me to offer my analysis, my thought leadership on banking, fintech to you, my readers. Here’s some of what I think it means:
You don’t really know what is going on in your customer’s lives. It’s really impossible to tell if a customer is transferring money into an external account because she got a better rate or she’s saving money to leave an abusive partner.
Your assumptions based on traditional demographic segmentation are probably wrong. I’ve been writing about this for a long time so here’s a personal example. As a knowledge worker who was a divorced single mother of 2 children, I had much different financial situation than others in a similar demographic. I didn’t need tips on how to save money more for retirement. I needed advice on how to recover from the long term financial impact of divorce (there was no such advice).
You can do a better job and you can be more human when customers do tell you things, whether it’s through their data, behavior or words. No, I’m not going to make the case that branches are coming back – but – humans can help you do a better job. Financial institutions that want to be responsive to humans must use actual empathy and listening – not scripted responses and algorithmic empathy. I’m not talking just about ChatGPT (yes, good uses cases are emerging for that tool, too). For example, my elderly mother once asked a branch manager to add her housecleaner to her bank account. Her branch manager, who knew my mother well, called me (I was listed on the account) and described what happened and told me he wouldn’t do that. (By the way, I took this call while waiting for a flight.) I was able to contact my mother’s attorney and make sure she and her finances were protected. Had I called the bank’s customer service number for help, I’m sure I’d never gotten any help. By the way, this kind of fraud against the elderly is common. This means FIs must:
Hire and train people who work as customer service reps, branch managers, etc. who can do more than follow a script designed to close phone calls within 2 minutes.
Eliminate the friction involved in getting to that customer service rep. Why should a customer have to repeatedly press the “0” button on her phone to get a person to talk to?
Your employees. Not only is it hard for an FI to know everything about a customer from her bank accounts and balances, but it’s also difficult for that same FI to know much about their employees’ personal lives. If we have learned anything from the past 3 years, it’s that managers, employers, co-workers don’t know much about what goes on at home, after work. The pandemic made visible what is often invisible until there’s a lockdown, schools closed and many workers have to live on zoom with kids in the background. Most of your assumptions are probably wrong.
I moderated a great panel of folks for a conversation on innovation. We cut through the hype and share practical advice for making your digital transformation efforts pay off. We definitely talked about the importance of small innovations.
How can banks be truly low friction? They must address friction everywhere. Otherwise innovation & digital transformation will elude them. In this report I identified the characteristic of a low friction bank and why legacy core banking and architectures don’t support it.
What can the Kardashians teach your financial institution about partnerships and innovation? How can working with empathic fintechs help you identify niche groups (aka hidden tribes) and innovate. All this and more in this this ebook that you can download at Praxent or Nymbus.
Adopt an Agile Digital Banking Platform: How bankers must have an agile digital banking platform to support both global and local trends and requirements to help them identify new niche markets that will drive innovation, create new value and increase profitability. In this report I identified a set of capabilities that a digital banking platform must have that will help take banks into a competitive future and urges banks to select a digital banking partner who shares their innovation, vision and support for new value creation.
How Your Financial Institution Can Leverage Niche Markets for Next-Level Growth: The old rules that influenced how mid-sized financial institutions acquired technology and the tradeoffs they had to make no longer apply. Why? Because new thinking on old models brings new ways for banks and credit unions to deliver new products and services to new niche customer markets. I moderated a vibrant discussion about this & more with Jeffery Kendall, Chairman and CEO, Nymbus and Tim Hamilton, CEO of Praxent.
Digital banking transformation’s surprising secret for success in Entersekt’s ebook New Directions in Authentication
Yes, I worked with clients on these ebooks and webinars. They may ask you for information before you can download or watch them.
How can I help you?
I’m also available for inquiry and strategy sessions via Third Eye Advisory.
Who writes PivotAssets?
I’m an independent analyst & consultant (& a former Gartner analyst). I’ve worked in and covered the banking industry for over 2 decades. I write about
digital banking in this newsletter - not to confirm what you know (and you are plenty smart!) but to give you a fresh perspective & analysis on the transformation that is —and isn’t happening - in the industry.