How Banks Can Differentiate Beyond Products

In a recent comment on a Finextra post, Madelie von Ludwig of Nedbank, Johannesburg wrote that banking products “are becoming a commodity and differentiation has to take place on another level”.

I agree with Ms. von Ludwig. Like we do for high-tech companies with our proprietary STRADOF framework, banks and financial services companies can also look beyond the product to find differentiators in various attributes of the “Total Ownership Experience”.

With my current ongoing struggle with two Top 5 UK banks to remit money from UK to India, “Concierge Remittance” is one such differentiated offering that readily comes to my mind. An in-person consultative service by knowledgeable staff at the branch premise will help demystify BIC, IBAN, and the other jargon involved in a typical high-stake remittance transaction.

In a previous experience a few years ago, it was very off-putting for me to reach the branch of a Top 5 UK bank to do a remittance transaction in person, only to be directed toward a telephone because they didn’t handle cross-border remittances from the branch. Mind you, I’m not talking about some remote branch – it was the one located right below the bank’s global headquarters in London. What was worse, I had to shout out a 30-character IBAN number, beneficiary name, and other details loudly enough so that I could be heard over the din of the surrounding lunch hour Canary Wharf crowd. And the point to note is that the telephone transfer didn’t come free-of-cost. Even at double that fee, I’m sure many remitters would prefer face-to-face service for such transactions, so “Concierge Remittance” can very well be a profitable offering from day-one.

Banks are in a lucky situation where their customers – like me – provide them with free advice to make more money! I only hope they’re listening. It’s really upto them to differentiate themselves by offering value added services that can earn them extra fee income, or risk losing business to MoneyGram, Western Union, XOOM and other money transfer operators and innovative payment service providers.