Reflections on NetFinance 2014: It's about relationships

NetFinance 2014 just finished in Miami. Celent spoke on "Engaging Mobile Customers through Content, Display, Alerts, and More,” which generated a number of follow-on conversations on how to execute on the notion of engaging with customers, and a great question on how long today’s innovation stays differentiated. Our answer: “not very.” I've mentioned before that customer-centricity is becoming a key concept that many banks are highlighting as a key point of their retail strategy. What NetFinance crystallized for me is that the necessary follow-on to this customer-centricity is this simple idea: The best defense against continuing commoditization is a solid customer relationship. Technology, clearly, can go a long way to enhancing that relationship. A number of vendors at the show (like AdRoll, Backbase, Domo, EarthIntegrate, Ektron, Epsilon, IgnitionOne, Leadfusion, Liferay, Message Systems, Message Broadcast, and Personetics, among others) focus on helping banks touch customers at the right times, or giving them an omnichannel view of all customer touch points, or enabling customers to start a transaction in one channel and continue it in another. But for these technologies to be effective, customers need to be receptive. And they're going to be more receptive if they think, and feel, and believe in their gut, that their bank is going to do the right thing by them. All the technology in the world can’t replace some very visceral customer feelings. To engender these feelings with their customers, and stop them from transacting with one hand holding their wallet so their pocket doesn't get picked, banks should consider some potentially radical ideas (simple concepts?):

• Not every touch needs to be a sale.
• Foregoing short-term income for longer term gain can (in many instances) make sense
• Surprising customers on the upside can yield long-term benefits

Now, the natural reaction to this is that it potentially puts banks into a (short-term) revenue hole. And that may be true, but when the real game of ongoing commoditization is long-term, banks need to thinking beyond the next quarter.