Creating the bank of the future

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BUSINESS CASES Co-Creation - this is the term by which the Consorsbank treads new paths in the retail business: They involve their customers in the development of products and services. Thereby, modern means of communication like Social Media and communities play increasingly important roles in the individual client business. Initial exerience has shown that the customers happily accept the opportunity to make a contribution, which makes the concept a significant step towards the future of banking.

“The customer is king” is an old merchant’s saying which is not heard all that often anymore. Today it is rather about the “autonomous customer”, meaning someone who is well-informed, who compares several offers and decides on the respective best solution for his or her demands before settling for one option. Ideally, the customer is already fully informed about the risks of the business. On the whole, the customer is nobody who can be deluded and it is wise to refrain from doing so. It is someone you adress as an equal. The banking business often applies traditional methods: the customer can typically only exercise influence on products, services and conditions by choosing between several providers. Of course this is true for other branches as well. Nevertheless it should be questioned if these conditions are still up to date, especially talking about finance - a business where, due to legal provisions, the focus lies on the “autonomy” of the customers. Is it not, then, crucial to involve them in the decisions and happenings to create services that actually fit their needs? This exactly is what the Consorsbank does as a completely digital and mobile bank and which is labelled Co-Creation.

Why the customer is different today

Fact is: Through the digitalization of our lives the number of autonomous customers increased dramatically. Search engines, comparing platforms or Social Media have naturally made our world more transparent and more democratic. When booking a trip, you compare multiple offers with nothing more than a few clicks. When buying a washing machine, you read tests and user reports online. Deciding which car to buy is not done at the dealership anymore. The web has respective offers for almost all areas of our lives and we happily accept them. Only in matters of money we are still rather conservative – and less progressed. One of the basic ideas of the internet is the concept of collective intelligence. Enabling us to make use of it is one of the most striking traits the web can offer. Regarding the matter professionally poses two questions: Is this approach really transferrable to the banking sector, this highly complex, challenging and ever-changing business that depends so much on information? Or put differently: How many people can truly be called autonomous customers in this field, regarding their financial knowledge and their interest in the subject? For the majority of the people, banking activities merely serve a functional purpose and are nothing they would do with pleasure. Only a minority is passionately involved in bonds and brokerage. Strangely, many people tackle the purchase of a vacuum cleaner with more enthusiasm than their financial investments. Is it realistic, then, to expect active participation of the customers in the offerings and services of a bank? Will anyone be interested?

Co-Creation holds brand-value

The answer is clear: Yes. At least this is what our initial experience has shown since December, when Cortal Consors was renamed to Consorsbank and returned with a new approach and new aspiration: Listening to the customer, bringing him on board, developing ideas with him and offering him tailor-made solutions. Actually the resonance was surprisingly positive. Of course now, after a few months, it is still too early to evaluate this innovatve approach fundamentally. But as of today, it can already be stated that the feedback is absolutely positive, both qualitatively and quantitatively. Resonance among the community is huge, the users are bursting with ideas. Accordingly, one of our goals seems to be reached: co-creation became a trademark of the Consorsbank and attracts customers. Therefore we will take a closer look at the approach. The concrete realization of the project „co-creation“ began in June 2013, with a workshop in Berlin. A mix of architects, designers, start-up founders and journalists got together with customers in the course of the „Hello bank!“ initiative, exchanged ideas, guessed, puzzled, discussed and created. The basic questions were: What does the bank of tomorrow have to accomplish? How can financial business become more transparent and customer-friendly? How can we use the means of communications the 21st century offers to realize all this? What followed this phase were by no means just simulation games - the workshop achieved concrete results, namely six products and services, some of which are by now available as full services of the Consorsbank.

Customers impel the evolution of banking

Of course these are no groundbreaking revolutions in the financial business, they are no fundamentally new ideas. But if we would expect only groundbreaking ideas, the banking business would have been working incorrectly for hundreds of years. It is more about evolution, adaption to today’s prerequisites, about detail and finesse that optimize the offer in the customer’s view. This process new and exciting for the employees of the Concorsbank as well. For example, some of the ideas derived from the workshop influenced the new finance planner - a digital budget book prodviding a detailled overview about expenses and revenues on different accounts. It is one of our latest tools in offer. It categorizes all financial movements and reveals potential for saving. All data is depicted graphically through diagrams or in a timeline - of course also on portable devices.

Banking: an open process

The community is a substantial part of the Consorsbank. It has evolved into a kind of permanent workshop, causing the evolution to progress constantly. Corresponding to the rules of social media, each customer can introduce own concepts in the Idea area. This takes banking to a whole new level: it now appears as an open process. Resulting from this is a high level of expectation of the participants, who want their ideas to be taken seriously. Co-creation thus cannot end in itself – who only pretends to take the customer into account, will fail. Co-creation calls for the bank to not only provide a platform, but to take requests and suggestions seriously and to react adequately and swiftly, just as we are used to in the web. Apart from transparency and means for exchange, all conditions and products offered by the bank need to be competitive as well. Nobody would accept fees, overt or hidden, for their participation in a community. To get to the heart of it: A bank that allows for participation to such an extent and that allows public assessment of itself and its products conveys an image of high credibility. And credibility is known to be a rare good that can hardly be appreciated enough in this business. Through Co-creation the Consorsbank proofs that participation pays off, because you can actually change your bank. But does this mean that Social Banking might be the only possible future of the retail business? Of course not. It is an advancement, an evolution that takes into consideration modern means and habits of communication. It is without a doubt a growing market. Still, in the future there will certainly be space left for the traditional banks and their customers.

Social banking is a strategy

But taking the step towards Social Banking was still a strategic move. Banking is basically a „me too“ business, differentiation between market participants is eventually made in very fine-grained nuances. For BNP Paribas as the parent company, Consorsbank is a kind of digital spearhead of the corporation. Not only because parts of it add to the digital „Hello bank“ offers of BNP Paribas in other countries. But because by now, at Consorsbank there are teams developing apps and websites for other corporate activities. Consorsbank is a substantial part of the growth strategy of BNP Paribas in Germany. The acquisition of the DAB bank serves as evidence for this. The DAB bank has a history and business case similar to Consorsbank, focussing on banking and brokerage, as well as having a strong B2B branch in the business with independent asset managers. This merger is not only going to enlarge the customer base considerably to 1,4 million, increasing the relevance of the bank in the process. It will also provide the customer with the very best of both worlds. Because in the end the customers still somehow remains king.