This is a very difficult for me to say…

…we have had a really good run together…but it’s time…

…it’s time we moved on…I need a break…

…it’s not you, it’s me... 

…I have new needs…

…I am no longer interested in self-service…I just want selfless service…

It’s finally time for banks to end their obsession with self-service.   The addiction to cost reduction and channel migration has masked the need to evolve banking products and services.  The steadfast focus on taking processes from the branch and replicating them online is holding the industry back.  Sure, customers enjoy the convenience of online banking but the industry should have moved beyond balances, statements and payments years ago.  Self-service is dead.  Banks need a new strategy and that strategy is ‘selfless service’ instead.

When online banking was first launched it had the dual benefit of being more convenient for customers and cheaper for banks.  As customers fell in love with the ability to manage their money online, banks fell in love with the lower cost model.  The business cases kept writing themselves.  It was as simple.  Identify a process done in branch and ‘digitise’ it.  Unfortunately, this focus on self-service has created some unintended consequences.  Processes were simply copied.  There were no improvements.  There were no questions asked…

Sure, delivering a cheaper way to do something sounds great.  It’s ‘Strategy 101’.  It has however meant that investment hasn’t gone into new forms of banking. Due to this fascination with self-service, the scope of banking has remained largely unchanged for decades.  Scarily, the same thing is happening again.  Most banks are in the process of replicating the very same services they launched on Internet banking for Mobile banking.  At some point soon, they will do the same with Tablet banking, then Google Glass or whatever other new form factors emerge. 

The real loser in all this is the customer.  It means that by and large, even though the distribution mechanism has changed, customers are limited to doing the same things they could always do.  To fill this gap new businesses have emerged.  The banks should have invented Mint.  They should also have invented Square… Pay Pal…and Groupon.  The list goes on and on.  They didn’t because they didn’t rethink the opportunity that new technology delivered.  They just copied the old process and stuck it online.

Due to this behaviour banks have ultimately sold digital channels short.  It’s now time to be more ambitious and transition the focus from self-service to selfless service.  It is a strategy with only one focus – customer need.  Propositions like smart notifications, reward coupons and spending advice offer hope.  They sit outside the traditional scope of banking and give customers a new sense of value.  They also generate real value to the customer.  They actually maximise the money a customer has to save and spend.  How about that? A bank that actually helped you keep more money in your pocket…

Whilst self-service was once the saviour of the banking industry it is now its own worst enemy.  It has created a mind-set that has blocked service improvement, expansion and innovation.  Moving to a focus on selfless service changes the paradigm.  It moves the question from ‘How did we do it in branch?’ to ‘How do our customers want to do it now?’  New technology and changing consumer behaviours mean that there are widening gaps between the processes of the past and the expectations of the now.  Until such time as banks pivot to this thought pattern there will be opportunity for further disruption.