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1.3 Wrap Up: Thought Traps

This chapter was concerned with presenting potential thought traps in the digital age. They result from the fact that future customer behaviour is examined using the successful analytical tools of the past. Six potential thought traps were identified and presented. Below are some recommendations for action to avoid these traps, in order to generate added value by integrating them adequately into the strategic control of banks.

Ø Thought Trap 1: Innovation Is Possible Without Customers The active involvement of customers (and other external agents) in innovation development can greatly increase the creative potential and initiate change. Correctly understanding the motivation and agendas of the individual customer will become a key competence and the essential factor for successful business models in the digital age. Opening up the organisation is an important step towards a learning,[1] flexible and fluid [2] organisation.

Ø Thought Trap 2: Customers Are Rational and Informed The model of the Homo oeconomicus is a tool that helps to understand and interpret the fundamental behaviour of the customer. However, it is not a reflection of reality. Customers do not always act rationally and they do not always have all of the necessary information to hand. In order to better understand customer behaviour, a radical rethink is necessary, integrating the perspective of psychology and other disciplines. These help in interpreting the emotional aspects of customer behaviour. The field of behavioural economics in particular provides new explanatory tools for human behaviour, with its concepts of heuristics, framing effects, aversion and cognitive dissonance. When making decisions, customers are in part rational and in part irrational; at times informed and at other times poorly informed.

Ø Thought Trap 3: Understanding the Customer Is Sufficient for Securing Future Viability Experience is valuable. Yet it should not misguide one into thinking that one already understands the customer comprehensively. Qualitative tools such as consumer insights or costumer journeys supplement classic market research and are important instruments of innovation development. They expand the view of the direct touchpoints between banks and their customers and provide deeper insights into customer needs. This provides a comprehensive picture of the hidden and/or previously unknown motives, attitudes, values, views and consumer behaviour of the customer. By designing the services accordingly, the resulting customer focus is not only communicated but also generally noticeable, leading to true differentiation in the digital age.

Ø Thought Trap 4: The Customers Will Come to the Bank Customers can conduct most of their transactions, including cash withdrawals, without any personal contact with a bank. They do not actively seek contact with a customer care advisor or a bank. Yet the foundation of the current sales and branch concepts of many banks is the assumption of the personal visit by a customer to an advisor. These concepts must be re-examined due to their questionable effectiveness—they are obviously not working—and lack of profitability—with higher fixed costs for personal advisors and branches. In the medium term, banks should aim for business models in which cash services and other transactions play only a minor role.

Ø Thought Trap 5: Sales Take Place Either in the Branch or Online A new user behaviour is developing among customers. Parallel channel use is becoming state-of-the-art. For instance, customers can inform themselves online while at the same time conducting a personal dialogue by telephone or in person. The winners will be hybrid transaction and advisory concepts that are not only available on all channels, but which can also successfully implement the overlapping of different channels in sales and consultation processes.

Ø Thought Trap 6: The Banks' Internal IT Defines Device Usage “Omnidevicing” with fluid boundaries between private and professional IT infrastructure is a prerequisite for the future viability of business models. Both customers and advisors use devices and IT that have not been developed by the banks—in future, technological standards primarily will be driven externally—and this is a paradigmatic change for banks. At the same time, the demands placed on advisors are growing, as customers use not only the latest devices, but also PFM systems prior to consultations. The advisor no longer has an information advantage—the key competence in the direct contact between the customer and advisor is the tailored evaluation of the available information and the development of solutions with the realtime involvement of the customer.

  • [1] Senge (2011) refers to an adaptable organisation that reacts to external and internal stimuli a learning organization
  • [2] Saaman (2012) defines the fluid organisation as a flowing entity. Role categories replace positions or functions, responsibility replaces goals and the key task is to serve the customer, in order to raise competitiveness
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