Banks Can Become Trusted and Indispensable, Here's How...

Imagine it's 2015. The Internet now powers everything, everyday: from the music, films and games that entertain us, to the way we look after and use our houses, cars and money.
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Imagine it's 2015. The Internet now powers everything, everyday: from the music, films and games that entertain us, to the way we look after and use our houses, cars and money.

Western economies are eight years into a slow-growth, high-unemployment era. Hardly anyone has anything left over at the end of the month. Most of us struggle to maintain lifestyles of just 10 years ago.

Understandably, social unrest is everywhere. The London street riots of 2011 and Occupy protests are commonplace across Europe. We are increasingly connected, and able to self-organise. This enables ordinary folk to take up the cause against those they blame the most.

Banks!

In a populist attempt to keep the public from total revolt, politicians across Europe ban banks.

Spotting the opportunity of a lifetime, several non-banks step in to fill the gap and they start by providing a safe, rewarding place to deposit your pay check every month. Which would you choose?

This was the scenario we posed to 500 consumers in a survey we conducted at Wolff Olins ahead of the European Retail Banking Summit last week.

The findings are interesting.

First, 40% of people literally rejected the scenario "we cannot imagine a world without banks" and another 40% picked the business that most resemble banks - the Post Office and Tesco.

In other words, despite a pervasive anti-banking sentiment, you could argue that the fundamental role banks play in our lives is under no threat from the large majority of people.

In a world where we have no physical connection with many of the products and services we consume, the physicality of banks - the security, access and service that this implies - remains as critical as ever.

You could argue that while economics and regulation continue to be major forces on banks to change, consumer pressure is not. Which would explain why, despite their failure to change, banks' churn rates are a fraction of those in other regulated industries like telecoms.

Here's the rub though. Benign conditions beget complacency. And complacency leaves you open to an attack from the blindside. Where could such a hit come from for banks?

Well, back to our survey. The other 20% said they would bank with Amazon, iTunes or Google. The reason: these brands know them well, and use this knowledge to make their products and services better everyday. We can see brands biting at the heels of the banking sector, last week's news that Virgin Money have bought Northern Rock is a case in point. It will be interesting to see how people respond to a pre-existing brand become a new bank.

A growing minority of people are absolutely fine for a few organisations to leverage intimate details about their lives - as long as this results in a better experience or offering. These modern, innovative, often unregulated brands handle everything from price comparisons, rewards, deals and payment facilities. This daily relevance in our lives will increasingly encroach on the traditional role that banks play - a role built on being the only ones we trust on all things to do with money.

And yet, as customers become more aware that their identity is a currency as important as their money, who is better placed than banks to be the always-trusted, always-on presence in their lives?

Indeed, while the 2015 scenario is imagined, it is pertinent to today. There are some significant challenges for banks to overcome, but these challenges also present a huge opportunity for them to rearticulate their role in society.

Can banks be the ones who we completely trust to leverage our identities - who we are, where we go and what we like - to find us the best possible deals, products, rewards and price? If they could, it will give them an active, optimistic, aspirational role in our everyday lives.

Or perhaps the new role for banks is linked to their legacy as custodians of our most meaningful possessions. In a world where all sorts of organisations are after our data, perhaps banks are the one that protect and secure it for us, putting each individual in control. In the future, our bank statement might not only tells us what money we've put in and what we've taken out, but also what data we now own, who we've shared it with and what value it currently has.