Banking Relationships in a Digital Age

I'm sure that we've all heard banks talking about the importance of their customer relationships. The idea of a relationship with a bank or any other service provider has always troubled me, not least because it should be a mutual two-way arrangement like any other. If you think about your personal relationships with friends and family, you know details about them which you can react and respond to. This knowledge is built up over time and is particularly helpful when we need to consider buying gifts and presents, or organise a social event which they will enjoy, writes Paul Bartholomew-Keen

I’m sure that we’ve all heard banks talking about the importance of their customer relationships. The idea of a relationship with a bank or any other service provider has always troubled me, not least because it should be a mutual two-way arrangement like any other. If you think about your personal relationships with friends and family, you know details about them which you can react and respond to. This knowledge is built up over time and is particularly helpful when we need to consider buying gifts and presents, or organise a social event which they will enjoy, writes Paul Bartholomew-Keen

For the most part we expect people to do the same for us and these types of interactions either add or subtract to the level of wellbeing with our overall relationships. When I think about my bank, I’ve had a ‘relationship’ with them for over twenty years. Not only do they have my bank accounts but also most of my credit cards, a share trading account, the house borrowing, plus my ISA’s. But outside of increasing my credit limit or offering me a new ISA, what does my bank proactively do for me with all of this knowledge? Nothing.

Maybe I should stop complaining and move banks and not ever expect them to send me a birthday card, but the ability for banks to proactively use knowledge to surprise and delight customers will become more critical in the digital age. As margins on payments and transactions continue to get squeezed, banks will need look outside of their traditional customer relationship. We’ve seen a number of questionable digital marriages in recent years between banks, telco’s, retailers and card schemes.

Everyone wanting to get into bed with each other through fear of not having a stake in the ownership and management of the customer. But now that people are armed with an array of smartphones, tablets/phablets, Apps, PC’s and Wi-Fi TV’s, we are now more likely to be ‘associated’ with a brand or company as our online and offline spending habits change.

Banks need to join up their transactional data and build on the customer experiences that come before the action of a payment. Being able to offer customers a purchase discount, a voucher, or cash-back on something that you actually need – and before you need it – will help kick-start a better relationship.

The banks hold the power keys to make this happen as they generally have the most data about how we like to shop and spend. They need to form better partnerships and marriages without the hang-ups on customer ownership to make this a success, so I’m looking forward to the tide turning and receiving my surprise.