Baby Got Bank


You cannot throw a rock in this business without hitting six different ideas for making banking better. You might think: There’s so much room for improvement, how complicated could it be?

In America, the basic checking account hasn’t changed much since 1933, give or take a few basis points. And until very, very recently, banking was firmly a product-focused business: Banks built savings accounts, checking accounts, gave out loans for cars, houses and business, the occasional variation on the same. Take it or leave it.

After the 2008 meltdown, banks began to embrace what retailers and consumer goods companies have always known: The consumer will tell you what they want, and you better listen. For a long time, banks thought they were immune from that last bit. And it’s true, there was reason to believe that they were, if not entirely impervious, then at least more resilient to customer displeasure, than other businesses. After all, the reasoning went, it’s one thing to change shampoos; it’s another to change banks.

Is it?

Is it really?

I used to hear that a lot (note the use of the imperfect tense.) I hardly ever hear it anymore. Tens of thousands of hours talking to every stripe of human being about their money and banking, and hardly ever. I more often hear one of two things:

  • “I’d love to switch, but they’re all the same.” Which means that at the first opportunity (and you know it’s coming), they’re out the door.
  • “I do all my banking with [100% digital bank] and it’s totally fine.” And you know all-digital is only going to get better, not worse.

Banking customers, unlike banks, have changed dramatically in terms of what they expect from their banks. In the last two years, we’ve seen customers have become more vocal and more absolute about three key things they expect, on demand, from their banks:

  1. Coach me. Hang onto your hats, but it’s a relatively new, and to some, faintly shocking idea that people are entitled to and can have help managing their own financial behavior. In ancient times (before 2008), the only person responsible for managing your money was you. Consumers now want on-demand help to reach their self-declared financial goals, whatever those may be, however fluid: Help me save more, spend less, pay my bills, make a budget, invest smarter.
  2. Go away. That same person, at any moment, can also decide they’ve had enough: That all the budget help they thought they wanted is actually intrusive, helicopter-ish, and slightly creepy. Yesterday’s diligent monitor of spend says, “Stop telling me what to do with my money; I’m a grown-up.” And they mean it. You better know when.
  3. Got my back? Critically, consumers expect banks to help in times of need, very broadly defined. Sometimes that’s event-driven, like when a government shutdown cancels paychecks for millions of federal workers. Other times, it’s a traumatic life change, like the day you realize that not only do you have to save for your kids’ college, but eldercare, too. More often, it’s something more routine, but today, entirely overlooked: Like why does my ten years of banking mean nothing when I need a good mortgage from the same brand?

The challenge of modern banking isn’t about efficiency, or first-to-market, or the next cool app. The real challenge is aligning banking to the ever-fluid, shape-shifting, needs of a single human life, full of changes, advance, and retrenching. The elements above aren’t segments of different populations: they’re the same person, sometimes, in the same moment. Find an app for that.

Previous articles focusing on the human element of Financial Services

Gen-X: Crossroads to Cashless?

It’s 2019. Do You Know Where Your Retirement Plans Are?

The Velocity of Money: Currency, Fiat, and Speed

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