I’ve lost count of how many times I’ve watched those in the financial services industry throw millions at the latest tech fad. Blockchain. AI. Big data. You name it, they’ve bought it. And you know what? It’s not working.
Don’t get me wrong. I’m all for innovations and love the advancements that have absolutely transformed the customer experience. But here’s the thing – your organization doesn’t need more tech, it needs better strategy.
The Tech Treadmill
Last year, I met with a regional bank that had just spent a fortune on a new AI-powered chatbot. Leadership was excited. “This will revolutionize our customer service!” they said. Fast forward six months, and guess what? Customer complaints were through the roof.
Why? Because the chatbot couldn’t understand basic customer queries. In fact all it did was create more frustration for the exact customers it was intended to serve. Sure they have this great tool, but it’s not accomplishing what it was supposed to.
This bank isn’t alone. The entire industry is on a tech treadmill, running faster and faster but going nowhere. They’re so busy chasing the next big thing, they’ve forgotten why they’re running in the first place.
The Numbers Don’t Lie
Back when I was at Forrester, we had done research that concluded most companies in the financial services industry spend an average of 10% of their revenue on technology. That’s billions of dollars every year. But here’s the sad part – customer satisfaction scores have remained stagnant over the past five years.
More tech, same results. Something doesn’t add up, right?
It’s not that technology is bad. Far from it. But when banks treat tech as a strategy rather than a tool, they’re chasing the wrong metric. Technology by itself doesn’t make the difference, it is the deployment of technology in the right scenario that creates customer satisfaction.
Strategy The Secret Weapon
So what’s the alternative? Strategy. Good, old-fashioned, human-centered strategy.
I once worked with a small community bank that didn’t have the budget for fancy AI or blockchain solutions. But what they did have was a clear strategy: know their customers, understand their needs, and meet those needs efficiently.
They invested in training their staff, streamlined their processes, and yes, used technology – but only where it made sense. The result? Their customer satisfaction scores were off the charts. They were growing while bigger banks were struggling.
This bank understood something crucial: technology is a how, not a why. Strategy is the why.
The Human Touch in a Digital World
Bottom line is that financial services is about people. Always has been, always will be. It’s about trust, relationships, and understanding. No amount of algorithms can replace that human touch.
Don’t believe me? Think about when you have a complex financial problem, do you want to talk to a chatbot or a human expert? I thought so.
The most successful institutions I’ve seen are those that use technology to enhance human interactions, not replace them. They’re the ones that have a clear strategy first, then choose technology that supports that strategy.
The Strategy-First Approach
So how can organizations break free from the tech treadmill and start running in the right direction? It’s simple, but not easy:
1. Start with the customer. What do they really need? Not what you think they need, but what they actually need.
2. Develop a clear strategy to meet those needs. This is where the hard thinking comes in.
3. Only then, look at how technology can support that strategy.
It sounds obvious, right? But you’d be amazed how many companies get this backwards. They start with the technology and try to find a problem it can solve, rather than starting with the problem and finding the right solution – which may or may not be technological.
The Billion-Dollar Question
So here’s the billion-dollar question: is your institution investing in more technology, or better strategy?
If it’s the former, it might be time for a rethink. Because in the race to digitize everything, many have forgotten the fundamentals of good service.
Don’t get me wrong. I’m not saying banks should forgoe technology investments. Technology has its place but it should instituted in pursuit of a specific outcome, not for the sake of deploying something “new and innovative.”
The Future of Financial Services
Trends come and go but the future of financial services won’t be won by whoever has the fanciest tech. It’ll be won by those who understand their customers best and have the right strategy to serve them.
The organizations that will thrive are those that can balance the efficiency of technology with the warmth of human interaction. They’re the ones that will use AI to free up their staff to have meaningful conversations with customers, not to replace those conversations entirely.
They’re the ones that will use blockchain to improve transparency, not as a buzzword to impress shareholders. They’re the ones that will use big data to understand their customers better, not to bombard them with irrelevant offers.
The Wake-Up Call
If you’re a leader reading this, consider it a wake-up call. It’s time to step off the tech treadmill and start thinking strategically.
Ask yourself: do you really need that shiny new tech solution, or do you need to revisit your core strategy? Are you investing in technology that truly serves your customers, or are you just keeping up with the competitors down the street?
Remember, every dollar spent on unnecessary technology is a dollar not spent on improving your core services, training your staff, or giving back to your community.
The Bottom Line
At the end of the day, all financial services is about trust. It’s about helping people and businesses manage their money safely and effectively. No amount of technology can replace the fundamentals of good service.
So yes, embrace technology. But don’t let it drive your business. Let your strategy do that. Because when you get the strategy right, the right technology will follow. And that’s when the magic happens.
Your customers don’t need all the latest gadgets. They need a provider that understands them, serves them well, and has their best interests at heart. Give them that, and you won’t just survive in this rapidly changing landscape – you’ll thrive.
The future of financial services isn’t about more technology. It’s about better strategy. And the sooner everyone realizes that, the better off we’ll all be.
Now, if you’ll excuse me, I’m off to try to convince another industry leader that the way to succeed in digital is not to invest so much in digital. Counterintuitive? Maybe just a little but doing the same as everyone else doesn’t work either.
