Chapter 4: From Products and Channels to Experiences

Navigating the Future of Banking with the Institute of Bankers in South Africa

Chapter 4 of Bank 4.0, advises that banking should move from products and channels to experiences.

In this chapter, King challenges the traditional banking model, which is built around products and channels, and advocates for a shift towards creating experiences for customers. Let’s break this down.

King emphasizes that the banking experience has historically been centered around physical products — like credit cards, loans, and savings accounts — and the channels through which these products are offered, such as branches and ATMs. However, he argues that this model is outdated and no longer meets the needs of today’s consumers, who expect seamless, engaging, and contextually relevant interactions.

The modern mantra from customers is: “I just want my banking to work for me, not the other way around! ”

King points out that the focus should shift from merely offering products to delivering experiences that resonate with the customer’s daily life. He introduces the concept of “embedded banking, ” where banking services are integrated into the fabric of everyday activities.

Now, let’s talk about friction—the enemy of good customer experiences. King highlights that while FinTech companies strive to eliminate friction, traditional banks often find themselves mired in it. He explains that incumbent banks are still trying to retrofit branch-based processes into digital experiences, leading to cumbersome and outdated interactions.

King remarks that "If you’re trying to get someone to pay their credit card via Alexa, you’ve missed the point entirely. " This quote encapsulates the essence of this chapter. It’s about using technology, like voice assistants, not just as new channels for old products, but as tools to create a frictionless experience.

King also discusses the role of technology in transforming banking experiences. He mentions how innovations like artificial intelligence and augmented reality can help banks provide personalized advice and contextual support. Imagine walking into a store, and your smart assistant alerts you to a better financing option or reminds you about an upcoming payment, all without you having to navigate a complex app.

This vision of banking is not just about convenience; it's about creating a relationship with the customer that is proactive and supportive.

As we move further into the digital age, King argues that banks need to become experience-driven organizations. This means rethinking their structures, employee roles, and how they engage with customers. He suggests that the traditional product-centric organization chart may no longer be effective and that banks need to embrace a more agile, experience-focused approach.

King is adamant that the future of banking will be built around delivering experiences to customers, not merely selling products. This shift requires a cultural change within organizations—one that prioritizes customer experience at every level.

Chapter 4 of Bank 4.0 serves as a wake-up call for traditional banks. The landscape is changing, and those that cling to outdated models risk being left behind. It’s time for banks to embrace the power of experiences and leverage technology to meet the demands of today’s consumers.