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Banking is no longer about money but about behavior

This post was originally posted at my blog and is here intended to relaunch my Finextra profile. Hope to post original throughts here, so do bookmark this page ;) 

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I've already shared my idea on banks' imperative to do more about financial marketing and less about the core persistence capability of payments: banking simply does not add up today.


Banking was dull and you had to have yourself brought to a level of understanding on how it worked, because you did not have an alternative to otherwise buy / sell / transfer money. Now you have, as the advancements of consumerism aided the big commerce players in doing payment schemes of their own, sometimes melding the derelict constructs of banks. Merchants are putting banks on their backs with Durbin and private label (retailers) debit card schemes / wallet schemes, and the power their CRM systems are wielding over consumers propensity to buy is way ahead of banks'.

The wallet experience empowers the consumer to dictate banks how they want to have their business done. Experience taken from selling goods over the Web is ahead of banks and that helps merchants to quickly educate consumers on how to navigate, click and buy, see what others bought, know more on how a particular item aid a customer in achieving his vocation, goal, task. Banks do nothing of the above.

The talk on APR and sweet no fees is just a technical talk / properties-of-the-product-stuff-kind-of talk. And the way the products are shown on the billboard just sharpens the mirror edge between the ad and reality.

Banks need to educate themselves to educate and help customers to manage their habits. That is different from helping them to pay, file for a loan, open deposit.

The rift is that new services are better at guessing (and exploiting) heuristics around consumerism and thus  take near full command over people desires on what to buy, what goals to save for, etc. They are designed  for today, while banks still carry the relics of past (i.e., remote channels are former professional front-office systems and that transfer the professional terminology on to uninitiated customers).

Today (or even yesterday) comes a redefining moment of banks to chose their destiny for the next couple dozen of years, as they did throughout the years:
- the quest of mass personalization is only possible by catering to people habits and augmenting, supporting, improving them.
- this is only chance to fend-off a growing number of loyalty / behavior-forming services that push banks far into the plumbing system.
- as with many instances where experts voice their "we are not ________ the right thing", here the banks should know that this time they are not selling the right thing. They are not products, not even goals. They are habits.

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