Innovation

"Canadian Banks – record earnings: runaway Canadian economy – favourable demographics; time to re-engineer! "

 This is a tough problem to have.  Lots of cash, and seemingly buoyant customer economics suggesting more profit growth. 

“Yet here we are in 2006 and the banks look stronger than ever, — ageing Baby Boomers and a lot of enthusiastic immigrants.

“There’s a good steady wind in the sails of the industry,” says Robert Pearce, president and chief executive of personal and commercial clients at Bank of Montreal. That steady wind will only get stronger with favourable demographics, he adds.”

Source: “Canadian Banks & Insurance – Mozilla Firefox”

The baby boomer wealth transfer has been long predicted for the last 20 years, and now its coming through big time.  Bank are in a great position to take advantage.

Its good timing to review some of the core activities that have been covered here recently.  This is precisely the time to invest in strategies for the future, that fit with the reality that is upon us, yet its not clear Banks’ are doing so. 

Some obvious activities:

  1. automate lending activities:  the demographic shifts require less need for lending, and combined with the commoditisation of mortgages, indicate cost elimination in this sector is essential. (nice tie in to yesterdays debate, which began here and continued here with James)
  2. automate all branch transactions for self service. Examples are passbooks, statements, cheque images, complete bill payment capability including bill presentment, interactive financial messages (account alerts), CRM fully integrating online and branch, online and ATM sales referrals, online account opening.
  3. re-engineer the call centre. Answering the phone is a waste of time for 90% of todays calls, and all we do is irritate customers.  Call centres should be focussed on sales, and levering  click to talk and here.
  4. re-engineer branch design.  Future branches don’t need vaults, and tellers.  But that’s not an overnight shift. 

What is not in the list >>>  more branches.  We don’t need that, at least not yet.   We may require more ‘feet on the street’ but lets understand branch design, and capabilities of current physical networks first.

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