Business Models Aren't Sacrosanct — but Relationships Are

By Martin, Dave | American Banker, December 4, 2014 | Go to article overview

Business Models Aren't Sacrosanct — but Relationships Are


Martin, Dave, American Banker


Byline: Dave Martin

A bank president once joked with me that he sometimes waxes nostalgic for the days in which strategic planning mostly meant looking at maps and population data and deciding where and how many branches to open. In the present era, bank leaders must make decisions of a different order, including whether to close or reconfigure branches and how to bet on the right technological investments for the future.

It's fair to say that the facilities, operational and staffing choices faced by senior management now are a little weightier than they were only a few years back. And the pace of industry transformation has turned up a notch. Changes that industry experts breathlessly predicted to be imminent a few years ago are actually happening right now.

Think back to the primeval era of 2007 when the iPhone debuted. At the time I was even more excited about another development: it was the first year my household was able to deposit checks from home using personal computers and scanners. As big a deal as smartphones were, I remember predicting that scanning checks at home was the real game-changer for branch traffic.

Those devices and that functionality have since melded. I'll count that as being mostly right.

There's no denying technology's impact on banking. But some people seem to believe that since banking's infrastructure has yet to be transformed to the degree that the music or video store industries have, our decades-old business models will continue to hold up.

This is wishful thinking. The banking industry has historically been slow to change. We're the embodiment of the phrase, "It takes a long time to turn an ocean liner around." But eventually, even ocean liners turn.

When discussing the current landscape of the industry, I regularly cite a quote by science fiction author William Gibson: "The future is already here-it's just not evenly distributed yet."

My point to managers is that there will be amazing, yet-to-be-discovered technologies in our future. But we needn't wait for new ones to transform our industry. We already have tools that work well and make customers' lives easier. Even if not one new technological advancement emerged in the next five years, consumers' increased acceptance and adoption of current technology guarantees sea changes ahead.

Better and more convenient ways of conducting business will inevitably win out. Folks still greatly value physical branch locations that they can see and touch, even they use them less frequently. …

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Business Models Aren't Sacrosanct — but Relationships Are
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