Internet banking is going through a transformation.
According to a study by Javelin Strategy & Research, eight out of ten US households now bank online, with 60 per cent using such services weekly and seven in ten utilizing them to pay their bills on a monthly basis. For banks, the opportunity is huge. Online banking customers are more profitable, carry more balances and have a lower probability to move to a competitor bank.
That said, banks need to do more. The banking customer has long evolved from the basic needs (Phase 1 and 2 below) in terms of ability to bank and pay bills anywhere, anytime via a secure and reliable network.
Firms like Zopa, Smartypig, Mint and Wesabe are pushing the envelope of what a traditional bank can or is expected to do.
To draw a parallel, I have adapted Maslow’s hierarchy of needs to the banking model. I have divided the hierarchy model into 6 phases
- Phase 1: Physiological: the bank is available 24 X 7 X 365 and transactions are handled efficiently and effectively.
- Phase 2: Security: banking is simple and easy, secure and always on. The fee charges are clear, simple and fair.
- Phase 3: Psychological: develop a sense of belonging towards the bank. Am inspired by other people who have successfully managed their financials.
- Phase 4: Individualization: the bank provides me personal support and attention. I receive relevant and customized offers.
- Phase 5: Self Esteem: the bank helps me in achieving personal goals and alerts me on financial risks.
- Phase 6: Self Actualization: the bank supports me in my strive to improve the world.
Over the next 4 posts, I will cover Phases 3-6 at length and offer some thoughts on what banks can do to increase the lifetime value of a customer.
I would be interested in your thoughts and comments.
Related Posts -
Banking for the myPod Generation This is the third post to discuss the transformation in online banking. In the previous posts, we discussed how the transformation in online banking can be mapped to Maslow's hierarchy of needs model and what banks can do to meet the customer's psychological needs.Here, I offer some thoughts on what...... -
Socialism is the New World Order - How Will Marketers Survive? The New World Order is Socialism: I mean the digital world! Successful brands of tomorrow will be the ones that are comfortable letting go of so called "control" and work with the customers in creating the brand image. According to Dunkin' Donuts Brand Marketing Officer Frances Allen: “Customers will......
This is truly a unique way of looking at this landscape! I look forward to your future posts.