BofA and MIT Look To The Future Of Banking

Bank Of America and the MIT Media Lab announced the creation of the Center For Future Banking. BofA has committed $3 to $5 million per year to the effort. Here’s some of the questions the research plans to address:

  • How can every customer be empowered with the knowledge and tools to take better control of their financial futures?
  • How will banking interactions evolve as a customer’s physical and virtual worlds become completely intertwined?
  • How will social networks and mobile platforms transform customers’ banking experiences, making it easier, more convenient, and better integrated with their daily lives? 

My take: I applaud the move. In my research report called The Financial Services Survival Guide from July, 2006, I highlighted the need for large-scale change in the industry. In particular, I defined five new skills that needed to be developed across the industry. Here’s the executive summary from that report:

Forrester’s customer advocacy rankings show that retail financial services firms aren’t meeting the current needs of customers. What’s causing the problem? Organizational silos. But Forrester sees an end to this status quo. The changing needs of customers, increasing competitive pressure, and emerging technology capabilities will push leading firms to break down their internal silos and create innovative new products and services.

Here are the technologies that I highlighted in that report:

Technologies That Are Changing Financial Services

Here’s an overview of the five new skills that I outlined:

  • Skill No. 1: Customer-centric DNA. Every company can meet customer needs some of the time. But to consistently deliver great experiences, firms need a deep-seated, companywide focus on customers. Rather than customer relationship management efforts that often focus narrowly on data warehouses and technology, firms should master customer-centric DNA, which consists of two elements: customer familiarity and organizational engagement.
  • Skill No. 2: Solution management. Today, firms develop new offerings for customers by tweaking the features of specific products, such as a new interest rate for a savings account, a different affinity group for a credit card, or a lowered price for trading in a brokerage account. But these product-centric efforts miss the opportunity to meet the financial needs of customers who cross the boundaries of a single product.
  • Skill No. 3: Cross-channel process agility. Customers want what they want – when and where they want it. A consumer may check mortgage rates online, verify terms over the phone, and then go into a branch to fill out the paperwork. While customers regularly cross over channels, many firms design their retail delivery models one channel at a time. To meet the needs of consumers, firms need to provide a seamless experience across channels using a skill that we call cross-channel process agility.
  • Skill No. 4: Integrated merchandising. In many financial institutions, marketing efforts are heavily focused on new customer acquisition. But firms are recognizing the importance of selling into their current base of customers as well. That’s why so many firms are now pushing products at customers – in the name of “cross-selling.” Rather than throwing products at customers, firms need to develop an integrated merchandising strategy that puts the right offering in front of the right customer, at the right time.
  • Skill No. 5: Interactive education. Let’s face it, financial services are complicated. How many consumers fully understand the difference between a variable and fixed-price mortgage, a Roth and a traditional IRA, or an ETF and a variable annuity? Rather than crafting marketing communications to push consumers through buying cycles, firms need to provide interactive education – information and tools that help consumers make good financial decisions.

The bottom line: The future of banking ain’t what it used to be.

Written by 

I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey.

Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum.

My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers.

I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

5 thoughts on “BofA and MIT Look To The Future Of Banking”

  1. There is so much focus on new programs and systems that people who are the real key are ignored . We have a great middle manager lady at chase gave a who serves as a gatekeeper in referring us to the right services and people . What is interesting they keep closing branches comsolidating staff and moving staff that this becomes increasing difficult to execute . All the efforts at customer service fail when the people continue to be ignored.

  2. Rachel: Yes, interactive education is critical.

    Bert: Thanks for bringing up people. You don’t get good customer experiences without focusing on your employees. Look at my post: “The End Of Customer Service? I Don’t Buy It.”

  3. Hi, i’ve followed the link to the report landing page because i’m interested in getting it and was considering forwarding it by mail to someone that can authorize the purchase for my company.

    There seems to be no “mail this to a friend” option in the page. I think you should have this option.

    BTW, i really like the content of this blog. Being a customer (like everybody else) i have so many stories…. The worst (in Argentina) are cell and cable operators.

    Cheers!

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