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Tomorrow's Consumers Shifting to "Everyday Bank" Services
Friday, June 20, 2014 6:25 AM

In a digital world, winning and retaining customers hinges on creating value that enhances the convenience and quality of their everyday lives beyond mere transactions. With more interaction, comes more opportunity for selling. This point of view is at the heart of the success of major digital players like Apple, Amazon, Alibaba (China's equivalent to Amazon), and Google.

Recent broad surveys back that up. Accenture, a global management consulting, technology services, and outsourcing company, conducted a recent survey in which they found that the younger generations are far more open to branchless and alternative banks. The survey reported that 39 percent of customers 18 to 34 years old would consider switching to a branchless bank, compared with 29 percent of customers aged 35 to 55 and 16 percent of customers over 55. Nearly 40 percent of North American consumers aged 18 to 34 would consider switching to an online-only bank; and 30-40 percent would bank with a technology company.

For financial institutions, this requires a shift in strategic focus from being a provider of financial products and services to being a provider of solutions. Banks cannot respond to threats simply by "being more digital," or closing down branches and rolling out better mobile and online banking services. Financial institutions must learn to play a greater role not just at the moment of the financial transaction, but before and afterwards, as well. This is Accenture's concept of the "Everyday Bank."

An Everyday Bank has a multi-faceted role built by collaborating to create "customer ecosystems," helping customers through the essential decisions in daily life. Instead of simply enabling them to save money and pay for things, financial institutions have the potential to combine their vast transactional data with new digital tools to help customers make decisions on what to buy, and where and when to buy it—whether it is dinner and a movie or a new automobile or home.

"Tomorrow's consumer is coming of age with a very different perception of what a bank could be," said Wayne Busch, managing director of Accenture’s North America Banking practice. He goes on to explain that those expectations could become profoundly disruptive to financial institutions "if non-bank entrants gain momentum and banks fail to adapt quickly. This will have important implications for the 'digital generation' spanning nearly all age groups."

Managing director in Accenture Distribution and Marketing Services Robert Mulhall, says, "Banking is widely viewed as a purely transactional activity, but people are seeking advice and relationships that improve their financial well-being. In this digital era, the most successful companies focus on solutions rather than products to simplify their customers' everyday lives." He adds that financial institutions also need to think this way.

Juan Pedro Moreno, senior managing director of Accenture's Global Banking practice, said, "Digital technologies are dissolving the boundaries between industry sectors. [Financial institutions] will need to move beyond their traditional role as enablers of financial transactions and providers of financial products to play a deeper role in the lives of their customers—by applying digital technology in new ways and by offering tangible value and advice based on transaction information."

It took Apple only seven years to become the world’s largest music retailer. In 18 months, Google erased 85 percent of the market capitalization of top GPS companies after launching its mobile maps app. Alibaba became the world's fourth largest money-market fund only nine months after entering the business.

Companies are increasingly venturing into other industries for growth. In Accenture's survey, 60 percent of executives from a cross-section of industries said their companies intend to make such moves over the next five years by way of alliances, joint ventures, or acquisitions.