How would you describe your relationship with your bank? Is it full of engagement and discovery? Probably not. In fact, most of us are stuck in fairly humdrum relationships with our banks. Like the old B.B. King song goes: “ The thrill is gone baby / The thrill is gone away from me / Although, I’ll still live on / But so lonely I’ll be.” Maybe we signed up for a checking account in high school or college, and we still carry around the same debit card, mostly on account of inertia.
This used to suit the banks just fine. Despite their advertisements to the contrary, the banks understood that there weren’t many real differences between them, so the hassle of switching accounts usually wasn’t worth it for the everyday consumer. If you could snag someone early, you could usually keep them for life, mostly because all the other options were just as unappealing. ‘Til death do us part.
Well, those days are over. The banks are getting disrupted. Today there are all kinds of new competitors in personal finance: Venmo for splitting tabs, RobinHood for buying stocks, SoFi for loans, Dwolla for payments, Transferwise for foreign currency conversion. Every function that’s listed on your bank statement has half a dozen startups associated with it.
So how should the banks respond? By re-imagining themselves as proactive service providers, as opposed to just financial storage containers. By giving us personalized services that add real value to our lives, beyond mundane financial incentives like three percent cash back.
Our London team recently conducted a personal banking survey with CitizenMe, and made some surprising discoveries. Over half of the respondents said that they would be happy to switch banks for one offering a free entertainment bundle like Netflix or Spotify. People also expressed interest in travel and smart phone insurance, car services, airline miles and utilities services. There are huge opportunities here for banks to start bundling in smart, creative ways.
Next week I’ll be at Subscribed London (and later this month I’ll be at the eMoney Advisor Summit), where I’ll be talking to new fintech companies as well as established financial firms. I think both have a lot to learn from one another. Banks, after all, still have a lot going for them. They have the infrastructure. They have the scale. And despite fallout from the 2008 financial crisis, most of them still have our trust.
What’s missing? Engagement. Personalization. A willingness to try new things. After all, our banks are where we store much of the value that we generate as creative-minded professionals. Where is their sense of creative value?
For more insights from Zuora CEO Tien Tzuo, sign up to receive the Subscribed Weekly here. The opinions expressed in the Subscribed Weekly are his own, not those of the company. The companies mentioned in this newsletter are not necessarily Zuora customers.
And check out his book SUBSCRIBED: Why the Subscription Model Will be Your Company’s Future – and What to Do About It.