Following the success of the inaugural experteq Banking Industry report, here is the second in a series of mini discussion papers capturing the key highlights from the insightful conversations that took place during the report launch.
The panel was moderated by Andrew Stabback, Managing Director, Australian Financial Publications, and included experteq CEO Shane Baker as well as Michelle Bagnall CEO RACQ Bank, Ryan Gonsalves, Head of Group Strategy, AMP and Dr. Catriona Wallis CEO and founder Flamingo AI.
The year that was
Two thousand and eighteen will be the year marked by the poor behavior of the big four banks and the misconduct surrounding their management and culture, poor risk management, and tardy customer service. And while the outlook seems bleak for consumers and the wider sector, our panel identified a silver lining for second, third and fourth-tier financial institutions. These organizations don’t necessarily carry legacy systems and processes of their larger counterparts and have been somewhat protected from recent events. Additionally, they are more agile and able to respond quickly to meet customer’s changing needs.
As Michelle Bagnall, CEO of RACQ Bank, pointed out, “we’re not big enough to worry about preserving the old legacy of what it is to be a bank. [Rather] we protect the brand and our members interaction with that brand and experience of it.”
Dr. Catriona Wallis, CEO and founder of Flamingo AI agreed, saying, “the ability to respond quickly is certainly unique because large organizations don’t have that opportunity. I think the ability to be able to respond to the opportunity in a marketplace is real and genuine for that size market.”
Based on the current mood in the industry, this way of thinking could prove to be a massive competitive edge for smaller organizations and guarantee them as customer-first providers moving into the future.
Consumers will likely feel a stronger sense of confidence in these institutions and they will be able to build a reputation around the provision of service and customer satisfaction in a way that the big banks have not been able to for a while, even preceding the Banking Royal Commission.
As Shane Baker, CEO experteq said, “I think the positive out of it, is that talking all about the customer.’ However, as Shane also pointed out the challenge is going to be how to seize the momentum and continuously provide great customer service in a constantly changing environment, especially around technology.
Shane continued, “I think the challenge is going back to the understanding and appreciation of where these technologies fit in, and what that means for an organization to be customer-centric. Importantly, having the realization that technology is going to drive that change.”
The role of technology
Much has been written and discussed around the importance of technology in a changing market. Technology creates an opportunity to build an organization around the consumer and have an increased focus on service provision and customer satisfaction.
This was a theme that resonated with many of our panelists who see the important role technology can play in building a strong customer-centric culture. Dr. Catriona Wallace, CEO and founder Flamingo AI, said, “We think this is a huge opportunity for the second, third, fourth tier financial services companies, particularly in Australia to move very quickly on the emerging tech. [For example] we do artificial intelligence software robots that guide customers through their customer experience, whether it is a sales experience or a service experience.
Dr. Wallace confirmed that she is seeing the bigger organizations less able to integrate emerging tech into their legacy systems. And as such, sees, “an opportunity for the smaller players to grab this technology and run fast at this”.
As the dust settles from the Royal Commission findings, and the big banks try to reinvent themselves, based on our findings and these discussions, our view is institutions whose culture is agile and open to change will be able to reinvent themselves. This will take time for the bigger banks. In the interim, we predict seeing the smaller institutions stepping up and winning market share with a customer-centric mindset.