Why social banking changes the game (for mortgages and everything else)

Oct 15th, 2014 | By FCT

How and why banking in the social era demands mortgage specialists focus on relationships, not transactions

Here’s the big picture. Research by LA-based consumer insights firm Cultura (the brains behind the US’s biggest advertising network) demonstrates there’s a real misalignment between customer expectation and bank thought-leadership. This goes far beyond ‘customer care’: it’s all about how relationships work.

The headlines? People are far more interested in what a financial institution is actually, visibly doing in their community than a new credit product. To cite but one of a dozen profound insights, Cultura’s research clearly indicates that reaching out to advise a family on a strategy for paying for university means more—and wins more loyalty—than yet another pitch for credit business. Collaboration is the watchword for service, the Cultura research shows: ‘You want my business? Work with me…as an equal.’

So what shapes this collaborative mindset? The customer’s own values. And they’re changing fast, as mobile banking explodes, to name but a single trend remaking customer expectations of financial services. One of the 20th century’s great business thinkers, the late C.K. Prahalad, identified three interlocking shifts in the customer’s value system, a loop of service-relationship-value-service-relationship:

  • companies are shifting from selling products to selling services. Products are still in the mix, but consumers find value in service as part of the product: (relationship = value)
  • companies are shifting from having transactional relationships with consumers (one-time or isolated interactions) to having service relationships with them, a series of ongoing interactions: (value = service)
  • companies are discovering their business-to-business and business-to-consumer models are merging together as services—in particular, financial services are a spectrum, not a series of siloes: (service = relationship)

Phil Haid, CEO and co-founder of Toronto’s PUBLIC, a social business-focused consultancy, echoes Cultura’s research about relationship/collaboration. “(Bank) brands worry about building a ‘real relationship’ with their customers, but I don’t think the relationship’s any different from any other human relationship in life. What makes for a good relationship? Honesty, consideration—human relationships are reciprocal. It’s about being accommodating and valuing the other person. A (bank) brand-customer relationship isn’t any different.” http://www.publicinc.com/people

What’s on your customers mind when it comes to their relationship with their Bank?  Are they looking for the answers to life’s questions or a credit card with no black-out periods?  How are you working to bridge the gap between meeting your business objectives and meeting the needs of your customers?

Additional Resources

Haid appears in Intersect, a short film about design thinking and corporate social responsibility, featuring Roger Martin of the Martin Prosperity Institute, Rotman School of Business, University of Toronto and other cutting-edge thinkers http://vimeo.com/89860285

Categories: Mortgage

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