Jobs in consumer banking world are changing — and fast
Editor’s note: this article originally appeared in The Philadelphia Business Journal. This version includes minor edits from the original.
Over the past few years, a new market research methodology has gained popularity amongst product and service companies of all types. It’s called “Jobs to be Done” and it goes beyond crafting traditional personas to uncover the real motivations and barriers customers hold when it comes to buying and using a product. Whereas personas often focus on characteristics of one theoretical customer (i.e., age, income), “Jobs” focuses on the actual tasks that people hire products and services to fulfill. Companies that better understand the jobs their customers need to fulfill can build the right products “for hire.”
In the consumer banking world, the jobs to be done have remained mostly the same for centuries. Need to save money? Here’s a savings account. Need to make a big purchase? Here’s a loan. But here’s the thing: how consumers hire for those jobs is evolving — fast. Why? See that shiny device in your hand? It’s a bank. In fact, it’s the most efficient bank ever. Mobile isn’t changing the job of banking, but it is changing the way in which consumers hire for the banking jobs they need to fill and the standard of service consumers expect.
The Hierarchy of Banking Needs
If we want to better understand the jobs of banking in this new digital-first era, let’s identify the hierarchy of banking needs, a la Maslow.
At the foundation is security. People need a safe place to put their money. The brick-and-mortar structures of the world along with the financial protections of the FDIC have fulfilled that hire reliably.
The next need of banking is commerce, the buying and selling of goods and services. Banks have always provided the record and means of non-cash payments, including trillions of money orders, checks, debit cards, and credit card transactions just in the 21st century alone. This need satisfied has shaped the traditions about where and how we use our money.
The third tier: access. If you let your neighbor borrow your axe, you’ll want that axe back when a tree comes crashing down on your lawn. Banks have increasingly provided more infrastructure to make accessing resources easier (i.e., more ATMs, extended banking hours, mobile deposits, etc.).
Moving into the top tiers of the hierarchy we see exactly how web and mobile have changed the fundamental nature of banking’s jobs to be done. First up: convenience. As modern society continues to expand and become more flat, consumers are increasingly expecting bank services to work on their terms — and that means digital. Online and mobile conveniences are now the table stakes for consumer banking. The bar is always rising and so there is (and always will be) a new wave of emerging digital standards that are going to heighten the expectations of convenience-oriented jobs to be done. Chief among them right now are conversational interfaces, or chatbots, that create personalized, on-demand customer service experiences. Whereas banks may have historically grappled with how to provide stellar customer service via IVRs or adding more (or more experienced) reps, these new technologies now let banks reduce friction and provide a higher level of engagement at far lower operating cost.
In a hyper-connected, hyper-social world, technologies like chatbots fit the customer first instead of fitting the bank first. Developing such solutions that fill these “jobs” the way the customer wants them to be filled is going to be either a market differentiator (see Bank of America’s Erica) or at least an indicator that an institution is keeping up with the pace of disruption powered by the fintech startup ecosystem.
The capstone banking need is intelligence; the self-actualization of digital services. Until recently, this need has been the most difficult to satisfy at scale. Sure, banks and other financial service providers offer tailored intelligence services, but those high-touch (and high-cost) services have traditionally been reserved for the most valuable customers. But the game is changing. Technology is delivering intelligence to customers across and a seemingly endless array of life concerns — from health to friendships and everything in between. That shift in expectations should drive banks to do the same. To be sure, digital savvy is the new socio-economic status that banks cannot ignore. Whether a customer is investing a hundred bucks or a hundred thousand, all that’s going to matter is whether or not they accept the status quo — and increasingly, they don’t.
The standards for consumer banking “hires” are changing. Customers are demanding mobile convenience and intelligence because they’re getting it in everywhere else. Perhaps most importantly, though, there is real opportunity for banks to meet their customers where they are and in what they do digitally, if not to create higher value relationships than surely to meet the bar of expectations that will allow for sustainability in a digital-first market.
It used to be that the banks with the most branches were the most successful, but that trend has long since reversed. What “Jobs” teaches us is that the bank that understands its customers’ needs and tailors its services to be “hired” will be the most successful. Banks must embrace the increasing expectations for convenience and intelligence and the role of digital in fulfilling those “hires” if they don’t want to get left behind.
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David Whitaker is Head of Strategy at Arcweb Technologies, a digital design & development company based in Philadelphia, and the organizer of the FinTech PHL meetup focused on the convergence of tech & financial services. He is also the product lead on Copilot, a conversational interface designed to help users proactively manage their finances with less time & effort than traditional methods.