A familiar disconnect
I have worked in financial services for over 25 years. Throughout my career as a marketing executive, it was my job to learn what consumers wanted from their financial services and banking relationships. Here’s what they told me they want:
- They want to do business with companies that could help them make the most of their money.
- They want objective, helpful information and straightforward pricing.
- They want knowledgeable guidance available when they needed it.
- And they want to feel connected to a community that shares their interests and cares about them.
Would you like to guess what people feel they are getting?
- They feel the financial industry does not know them or their needs.
- They feel their banks or money management companies put profits ahead of their own needs.
- They feel banking products were forced down their throat. For example, they regularly received cross-sell offers for products like mortgages or CDs that they did not have enough money to afford.
- And they feel deceived by companies who charge fees on top of fees.
While I am grateful that I have largely worked for “the good guys” – companies that aimed to be straightforward and fair to their customers, there is a clear disconnect between the demands of today’s consumer and the service and tools most traditional financial firms are willing to offer.
Why does this disconnect exist?
I believe this disconnect exists because financial firms often come from a product versus customer focus. Banks are often organized around product groups – the mortgage team, the checking team, the savings team, the investment team – in part for regulatory reasons and in part to optimize the revenue they can get by cross-selling their individual services to customers. Consequently, their pay and bonuses are directly tied to the sales they generate in their group instead of their customer’s overall financial outcomes. This exclusive focus on their own team’s revenue stream provides little incentive to communicate across different teams, especially when one team’s products may cannibalize the services of another. Given this lack of inter-team communication, it is not surprising that these companies often do not think about the broader customer experience.
“These companies often do not think of the broader customer experience”
It is this image of the banking customer trying to sort through so much, often irrelevant product advertising that I think captures one of the significant problems with how banking services are organized today. Between the good intentions of the organization and the departmental goals of employees, the effects on the customer are being lost . Many customers interpret this as somewhere between indifference and neglect on the part of their banking services provider. If the industry is to address the present challenges, it must find a way to reconnect to the customer. Certainly encouraging smaller organizations which can lean on mission and values to help ensure customer focus is certainly a good start. But the industry also needs systematic ways to stay connected to the customer and customer outcomes over time: better technology, better transparency, better metrics, better alignment.
“The best approach comes from a customer-first perspective”
It just so happens I have also long believed the best approach comes from a customer-first perspective: getting to know the needs of your customer and creating services and solutions that meet these needs. By doing right by your customer, you’ll gain their trust and they’ll continue to do business with you over their lifetime. They’ll also be happy to give you feedback and even referrals from friends and family —but only if you listen to them, add real value, and meet their needs. Companies that deliver on this promise will be rewarded over the long term.
Discovering a Company that Gets It.
One evening last November, I had the occasion to discover a company that I am excited to say could soon join those ranks.
My friend and colleague, Dana Burns, invited me to join her for a cocktail and conversation with Colin Walsh, the Founder of a newly launched startup. The company was going to launch a mobile banking app, designed to meet the needs of people who were underserved by existing financial companies. During the conversation, Colin, a banking industry veteran, painted a clear picture of the pain points current banking customers were facing:
- Product versus customer-focused approach
- High hidden fees
- Antiquated technology
- Brick & mortar versus mobile-focused delivery
- Lack of integration with other financial applications
- Failure to provide truly helpful education and service
With great passion, Colin shared his vision for his new mobile banking app that seemingly satisfied these demands: a mobile-first banking experience designed to make banking easy and intelligent. It would provide personalized insights and guidance right in the app. It would empower the customer to make smart financial decisions in the moment, on the go.
“Varo will be a company that closes the gap between the way banking currently operates and what people truly want from it”
By focusing on the needs of the customer, co-developing services and solutions that meet those needs, and getting continuous feedback from its customer community, Varo will be a company that closes the gap between the way banking currently operates and what people truly want from it.
I am excited to be a part of the Varo advisory team, helping Varo build a true customer-focused, mobile-first banking solution.
Join us in this mission by signing up for Early Access, today!
About Laurine Garrity:
Laurine Garrity is one of our marketing advisors. Over her 25 years in financial services she has served as the CMO of Charles Schwab and TD Ameritrade, and as an advisor to several FinTech startups just to name a few. Throughout her career, she has striven to empower consumers. When not advising Varo, Laurine enjoys spending time with her family and escaping to the beach whenever she can.