By Ayomide Ajayi
Over the years words like ‘ICT’, ‘technology’, and ‘digital’ have always been the words that describe the service offerings of modern banks in Nigeria. The commercial banks of the early ‘90s ran a more automated banking system compared to what existed before that period. They used the technology available at the time to fuel their service delivery amidst new products and services.
Technology itself is not the actual change, it is only an efficient tool and an access enabler. The technology of the early ’90s which we once described as ‘new ageʼ would not make much of an impact in todayʼs realities.
The brands that have emerged over the years had superior products and services, and different delivery models.
Technology fuelled their delivery models, but it was not the primary driver of their success. Although the discourse here is about building a financial brand for the new age and the emphasis is on the ‘new ageʼ, but the fundamentals remain the same (a strong brand), ‘new ageʼ always changes.
One would have thought that the advent of ATMs, mobile app technologies, USSD banking and AI-powered digital banking assistants (Ada and Leo) would, in reality, throw out the hassles customers face with financial services, yet customers do not have an indeed stress free account opening process, banks still have long queues in the banking halls and at the ATM gallery, ATMs are frequently out of service, non-existent waiting areas and quite a long list of unsolved banking troubles.
Seemingly, the fundamental problems of old banking systems are still in existence despite the technologies of the ‘new ageʼ.
Strong brands are created when there is cohesion between two powerful dimensions — a relevant and unmet customer need and a product that addresses the need in a simple and unique way.
With the rise of fintech brands, we are beginning to have fully online banks, efficiently low-cost money transfer platforms, apps that allow you to invest in stocks/shares and apps that provide easy access to credit and loan facilities.
We can now transfer money, make a payment, receive payment, invest in stocks and shares, buy insurance, check account balances using a mobile phone (or more specifically apps).
As against the option of standing in long queues in a bank branch, to submit a cheque, pay commission or some other ‘due processesʼ.
No one wants complex solutions. We all turn away from processes that require a lot of effort to understand and are drawn to a brand that has easy solutions and communicates them in the most simple and welcoming way. People want easy access to financial services, in solving this problem financial brands have to build products that meet these needs and are easy to use and understand.
With traditional banks losing their first mover advantage (an advantage that lasted for years), they seem to play a forceful catch up through avenues that may not guarantee success.
The first is adopting technologies that would help them stay competitive and the second are attempts to create internal entrepreneurial cultures to gain a foothold in the emerging industry (internal incubators, bank-sponsored fintech competitions, etc).
Will these avenues lead to a transformation of traditional financial services brands? I do not think so. We can at most have a new crop of financial institutions just the way we had them in the early 90ʼs; brands with legacies, systems, and processes suddenly trying to don the ‘emperorsʼ new clothes.
Fingerprint-based ATMs or allowing an applicant to sign digitally on an application form or creating a fast and efficient payment processing platform and then expecting it to work within the same old system does not imply transformation. Transformation is a deep and wide strategic outcome.
The question then becomes how do you build a strong new age financial brand? Again letʼs not jump on to the back of our favorite horse — technology. Financial brands that want to serve the common man (the mass customer base) has to understand the customerʼs attitude towards managing money.
The opportunity to create a strong brand is in and around the finite ways customers use money and their expectations from financial service providers.
The framework is simplicity and ease—the simplicity of access and nature of information, access to meaningful advice, ease of decision-making and implementation.
Unsurprisingly, the fundamentals remain the same, there is nothing ‘new ageʼ about this framework.
Technology will not turn the world upside down, it will only become a tool and enabler to access our daily lifestyles, the fintech disruptors and digital banks look like they have developed new frameworks for brand success and have used technology as their differentiator.
In reality, the technology is only the platform and a mode of access. The real differentiator is the ‘simplicity of access, decision-making, and implementationʼ
Cowrywise, Paystack, Interswitch, Flutterwave, Stripe and other global fintech disruptors depend on world-class technology infrastructure and ecosystem for their success. They donʼt own the smartphone customers use to access their services.
They donʼt own the App store or Google Play store from where their apps are downloaded. They donʼt own the 4G network (or the impending 5G roll-out). But they do own one thing, which is core to their offer — simplifying the management of money.
It is easy for financial brands (traditional banks and fintech) to get caught in the wave of technological advancements and the myriad possibilities for new service offerings it presents. But the fact is that achieving the right balance between simplicity and access is hard.
Anything hard is a potential source for achieving differentiation and an opportunity to tap into. For a new age financial services brand, product superiority is critical, but equally critical is the delivery of ‘simplicityʼ as a business model, an emotional and rational benefit and an opportunity for brand positioning.
Editor’s Note: This article was originally published in The Spark Magazine. Find the magazine here to read other articles.