BANKING: BETWEEN A ROCK AND HARD PLACE - TECHNOLOGY OR PEOPLE (March 15, 2017)

In an article published in the New Zealand Herald in February 2017,we read that banks are being warned they could lose customers if they continue to decrease their relationship based interactions. In another article on the website Stuff, we read Credit Union South is jettisoning staff and closing branches due to the growing use of online banking.

You could be forgiven for asking,what the heck is going on?

If that wasn’t enough,PwC New Zealand warned New Zealand banks in February that 80 percent of their consumer banking business faces disruption by the end of the decade from new players using technology creatively.

PwC may be referencing the likes of New Zealand online market place and peer-to-peer lender Harmoney, which itself (along with Google) released research in early March showing that the older demographic in Australia, plus 55-years, are happy to stay with their banks but neither do they intend to do much borrowing in the coming years.

Young Australians, however, the research revealed, intend to borrow more and are embracing the technology based, disruptive sharing economy with both arms.

On the other end of the scale, former banker Simon Bilton told the New Zealand Herald recently that his research findings point to the fact that ATMs, Internet banking and other technology are damaging to trust.

In view of seemingly conflicting reports and evidence, any good financial business could be forgiven for feeling like they’re caught between a rock and hard place.

The apparent conflict however, is a red herring because technology is not the problem.

The way it is being used, or perhaps more relevant, the motives behind its application, may be the real issue.

Humans are essentially social animals and human interaction is fundamental to our DNA. We instinctively dislike big faceless corporations, but we do business with people we know, like and trust, within those organisations.

Using technology to improve business efficiency by reducing human interactions is perhaps not the best use of it because our motives are based on what’s good for the business, not necessarily the customer.

The preference should be to utilise technology to make the customer’s life easier and less stressed, not the business.

This, says Asantha Wijeyeratnethe, CEO of successful start-up Simpy Payroll is the crux of the issue.

When we reached a certain size with Simply Payroll, we started receiving high call volumes and we decided to get an automated system to handle all the incoming calls. We put in a system and then got rid of it within six months because it wasn’t making our customers’ lives easier.

Simply Payroll is a fintech company specialising in the primary sector, but at its core it’s a company that combines human expertise with a technology solution. As in every business, investment in the human factor is essential for success, never mind growth.

Asantha says, The human interface is crucial it’s what makes us successful.

Sources:

http://www.stuff.co.nz/business/90188549/credit-union-closes-branches-as-online-banking-takes-over

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11799565

http://www.medianet.com.au/releases/127274/