TALKING ‘BOUT A REVOLUTION
Stop worrying about when the revolution in financial services is going to arrive. According to financial services expert Brett King, best-selling author of “Bank 2.0,” it’s already here.
“In terms of how banks interact with consumers, (this is) the most disruptive period that we have seen in the history of banking,” King says. “When you’ve got banks geared toward serving customers with physical instruments such as cash, checks or plastic credit cards, and these things are no longer going to be used – and people are no longer visiting physical branches – it’s a complete change in the way we do business.”
So much for making incremental adjustments.
At THINK 11 in May, King will discuss how credit unions can address this sea change. Recently, THINK caught up with King to talk about the trends and tribulations affecting our industry:
THINK: Financial services as we know them have had a great, centuries-long run. Why the sudden change?
KING: The psychology of (using the) Internet can’t be underestimated. Suddenly, at 11 p.m. we can get online and start paying our bills or transfer money, and we feel like we have control of our money for the first time. We aren’t required to visit a branch – or make a phone call or write a check.
THINK: No question, online account management has changed the game. But we’ve had that technology for a while. What’s accelerating change now?
KING: Expectations are increasing. We can get on our mobile phones and check in with an airline. We can even use our phones as boarding passes. Now, if you’re going to pay for something with a debit or credit card, the number one piece of information you might want is, “What’s my balance?” (Financial institutions) still may not be able to give people that information via mobile phone, but there’s an expectation that people should be able to get that information contextually. As the mobile phone becomes a credit card itself – as we begin to use it this way – we’ll be detaching ourselves even more from the physicality of the banking system.
THINK: What is that world going to look like?
KING: By 2015, the most interactive channel for day to day banking will be the mobile phone. Number two will be the Internet. Number three will be the ATM. Number four will be call centers. And number five will be branches.
THINK: How are credit unions going to compete in this new environment?
KING: It’s going to be interesting. There will be the challenge of moving forward with all of these innovations. I don’t think (credit unions) need to do all the things big banks are doing or build all the (systems) themselves. There may be collaborative opportunities where a number of credit unions get together and create common platforms. The good news there is that a credit union that was once limited to a geographical region doesn’t have to be anymore if they have a good platform.
THINK: Do credit unions have an edge in any area?
KING: There are elements where credit unions have an advantage. They’re built on the foundation of being there to serve members. If you look at what is one of the biggest drivers today, it’s the emergence of this idea of community through social media. Credit unions have the opportunity to adapt their knowledge of serving a community to the virtual space. If they do it well, they can get really high advocacy of a kind that would make banks like Chase and Wells Fargo envious.
To hear the whole interview with Brett King, find him on the THINK 11 speakers’ page and click “podcast.”