The executive team is busy working in the strategy department on level 4 of the exampleBank Headquarters (HQ) building. They are starting the very first iteration of the exampleBank strategy process. At this point levels 1-3 of the HQ building are empty. In fact, most of level 4 is a concrete floor. They are working in the only finished room: corporate research.
If we go back to how it all fits together we see that the first step of the strategy process is an environment scan to find the most important forces and trends. I will start by identifying the trends that I want to account for in the exampleBank strategy.
- Cloud Computing
- Mobile Adoption
- Reduced Transaction Costs: Causing the un-bundling of companies, including banks.
- Banking APIs
SOCIETAL AND CULTURAL TRENDS
- Immediate Everything: Consumers are increasingly expecting everything now. For exampleBank, these expectations will impact everything from the processing of international payments to
- Electronic Payments: Consumers are slowly adopting electronic payments and moving away from cash.
- Globe Trotters: The industrial age has caused people to leave their home town to follow job opportunities. This is increasingly causing people to relocate internationally. I am a good example (I am from the USA, have worked in 30 countries, and I am currently on assignment in Malaysia).
- Convenience Expectation: As consumers become more affluent they also become more busy. Consequently, they increasingly value services that save them time by automating or avoiding some activity. For example, an activity that can be avoided is filling in forms to provide information about who they are or what they want to buy or do. Relationships are important. Conversely, consumers are less and less willing to accept spam. Marketing offers need to be well-targeted and well-timed to be effective.
- Branch-less Banking: Consumers are becoming more open-minded about branch-less banking.
- New Market Entrants: Consumers are becoming more open-minded about receiving financial services from non-banks.
- Banks Extending their Reach: Consumers are becoming more open-minded about receiving services from banks that go beyond traditional financial services.
- Digital Natives.
- Increased Affluence: Around the world GDP’s are going up and people are becoming more affluent. In Asia financial services, an important trend is the emerging affluent segment. Affluent people are better educated and have more resources, which means more selective customers with higher expectations and more cash to save and invest.
This is all I have for now. Comment on this post if you have a few more that should be considered. I say “a few” because there are hundreds of trends that could be considered. I only want to spend a limited amount of time considering the most important trends affecting for banking.
Next on the agenda is a look at forces.