The Great Banking Reset: Merging High-Tech with High-Touch

Jim Marous (00:11):

Welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous.

Jim Marous (00:17):

The banking industry stands at a pivotal crossroads as we approach 2030. While the past quarter century was defined by digital transformation, which brought unprecedented efficiency and convenience, it also created unexpected paradox, the loss of personal connection in banking relationships.

Jim Marous (00:38):

In this episode, Michael Abbott, Senior Managing Director and Global Banking Lead at Accenture discusses how artificial intelligence and emerging technologies will help banks bridge this gap. They will enable them to combine digital efficiency with the personal touch that define banking's golden era.

Jim Marous (00:59):

We'll also explore how banks can differentiate themselves in an increasingly competitive landscape where technology alone is no longer enough to win customer loyalty. The leadership of an organization will be at the forefront of how an organization can succeed or be a laggard. The path to 2030 will require banks to fundamentally rethink how they serve, engage, and deliver value to customers.

Jim Marous (01:32):

As Mike Abbott reveals in Accenture's latest banking trends report, success will depend on the bank's ability to move beyond standard digital journeys to create genuine, personalized, and empathetic engagements that feel as natural as texting with a trusted friend.

Jim Marous (01:51):

So, Mike, you've joined us for the last several years to discuss Accenture's annual report on banking trends. However, this year's report was constructed slightly differently than the past. Can you explain a little bit?

Michael Abbott (02:05):

Yeah, Jim, we did something a little different this year. We still have the top 10 trends, but the questions we were getting from many of our clients now at the board level, is what do we think banking is going to look like in 2030.

Michael Abbott (02:18):

So, what we did is we kind of did a past, present, future. We went back and we looked at the past and said, what has driven banking for the past 30, 40, 50 years in many cases. We looked at the present, what's happening with AI and digital, and what are consumers saying right now? What is our research showing?

Michael Abbott (02:36):

And then we painted a picture of the future. And what we did in this year's trends was we stepped back and said, what are the key trends that we believe will drive banking in 2030. And a little different than the prior years, we didn't just look at a theme of things that were occurring. We looked at everything.

Michael Abbott (02:55):

We looked at structure of the industry, we looked at products. We looked at experiences, technology, operations, talent. We went across the entire banking spectrum from the structure of the industry, all the way to how operations worked, and tried to paint a picture of what we think banking's going to look like in 2030. And the trends that are happening right now in clients that we believe are going to shape that.

Jim Marous (03:16):

It's interesting, as opposed to a one-year view, you took a five-year view. It gives us a little bit more flexibility, but things are happening so fast. And as you mentioned, one of the things that are happening as fast as anything is the whole world, gen AI and AI in general.

Jim Marous (03:31):

Your report suggests that by 2030, AI will actually help restore the human touch in banking that has been lost as banks tried to digitize their mobile banking apps and their digital apps to almost being looking very similar, there's very little differentiation. Can you explain how this seemingly paradox of technology will help become more human?

Michael Abbott (03:57):

Yeah. In fact, the title of this year's report, Jim, is The Future is Back. And it's meant to say the future is looking at what had occurred in the past.

Michael Abbott (04:07):

And I think the best way for your listeners to understand this, it's just I want to describe my experience 30 years ago, getting a mortgage. 30 years ago when I went in to get a mortgage, my first mortgage, I walked into the bank, they filled out all of the forms for me, and they said, "Mike, all I need is your tax returns. Can you give those to me?" I gave them my tax returns.

Michael Abbott (04:27):

I came back the next day, all of the loan forms were filled out. They walked me through it and said, "Mike, here's what you're going to be paying, here's your monthly payment, are we good?" And I said, "Yes, I'll sign the loans."

Michael Abbott (04:38):

I want to contrast that with today. The bank did the work for me 30 years ago. They helped me get there. What's a bank do today with a digital journey? They've outsourced all the work to me. I fill out all the forms, I have to go through this, I have to find all of it. I have to double check it. I get stuck in their journeys. I got nobody I can talk to. I can't figure out what's going on. So, I become as you and I I've talked about before – I functionally I can get through the thing, but it is a royal pain.

Michael Abbott (05:04):

I believe the future is going to look more like the past. The idea of journeys and websites will go away. It'll be back to, “Hey, Jim, do you want to get a loan?” “Sure.” “I want to pull all your information in and here it is. It looks good. Yeah, I’ll send you a link, can you take a couple pictures of your tax returns? Oh, it's all filled out. Here we go.”

Michael Abbott (05:21):

Isn't that a much better experience than what we've done today, which is outsource all the work to our customers? That's the future. I think the future is the past, except it's enabled by technology. That's the big difference.

Jim Marous (05:33):

Well, it's interesting, Mike, because as we look at this, the whole digitization process in the banking world, from my perspective at least, my bias perspective to a degree, is that almost all the focus has been on the back office and efficiency as opposed to really making it more human as we keep on talking about. And in doing so, as you just mentioned, it pushes all the work back to the consumer and not using all the data that's available to make it easier.

Jim Marous (06:06):

I mean, you look at the way that Uber works and that Amazon works, and even Google and other apps that really have made it easier to engage. More interaction going on, more things going on that are not simply efficiency plays, even though they may be. How will the employee's role evolve as AI becomes more prevalent?

Michael Abbott (06:29):

Yeah. And when you look at the bank employees, one of the big questions we get, and we went into it in depth in this year's report, is we believe about 75% of the roles in banking are going to change. But that doesn't mean that they're going to be eliminated. It means that they're going to change the nature of work.

Michael Abbott (06:49):

And the analogy I would give you, Jim, is back in the 1980s when Excel came out (it was VisiCalc back then), every banker knew that finance was going to change. People were going to use spreadsheets instead of doing them on paper. And everyone predicted the demise of finance people. I can assure you, there are more finance people today in banking than there ever were in the past. And what I believe gen AI is going to do is change the nature of how we do work.

Michael Abbott (07:13):

So, let me give you an example. Take somebody that might be doing commercial loans, they can only do so many a day. But now imagine that they can take in dozens of commercial loans. They can use the technology to look through a polymer and find the right points. We're going to use AI to make our jobs better.

Michael Abbott (07:29):

And the point you made around cost versus revenue, I believe the banks that truly take advantage of this will think very differently. They will not think of gen AI as a cost play, they will think of it primarily as a revenue play.

Jim Marous (07:46):

It's interesting because it's getting out of our own way. And one thing that we've seen as we've done interviews for the last four years now, is that organizations, you can determine how effective they're going to be moving forward, no matter what size it is based on the leadership.

Jim Marous (08:05):

And leadership, we're kind of working against ourselves. We haven't had a bad year at any financial institution except a few maybe a handful of organizations, so we rest on our laurels to a degree.

Jim Marous (08:17):

We can tend to do banking as we've always done because it's never really derailed, but it has made as you bring out in the report over and over again – made the lack of any distinction between organizations, as you mentioned at the very beginning, the human factor.

Jim Marous (08:33):

We used to distinguish organizations based on how nice they were to walk in the branch, how well they knew me, how well they responded – heck, it’s the way we decide what restaurants we go to, what retailers we go to. But we've really become so based in what we used to always do and use the data simply to make us smarter.

Jim Marous (08:56):

How do you think organizations will do better at not just making it more efficient, but actually being more empathetic to my needs? Understanding my needs and maybe using agentic AI to build agents that can help me do better as a consumer?

Michael Abbott (09:15):

Yeah, so there's a bunch of parts that you've put in there. And the point number one you're making, and I couldn't agree more, is that as we become digital, it's a sea of sameness. Everybody is absolutely the same.

Michael Abbott (09:24):

We all have the same websites, the pages, the journeys. And when you look at the bank app ratings across North America, you'll find every single bank app is rated 4.8, 4.9. There's absolutely no differentiation. To your point, differentiation that used to be around the branch manager, the person who knows you.

Michael Abbott (09:40):

As we move forward, what I see happening is anybody that's spent a little bit of time with ChatGPT or any of these gen AI agents, what you notice is you notice when you ask it a question, it remembers where you left off. And that is the fundamental difference between the digital age and this generative AI age. And that's what banks are going to incorporate in.

Michael Abbott (10:03):

You opened it up with one of the quotes we have in there, which banking should be, "Texting with your best friend." Your best friend remembers what the last text was. What you're going to see banks do is use agentic AI capabilities to build out a memory of the customer. Remember where you started, the last conversation you had, and working with a bank through a digital experience will no longer feel like a journey, it'll feel like a continuity of conversation over time and continuity over channels.

Michael Abbott (10:31):

In many ways, Jim, it's going to feel like it felt walking into a branch manager that remembered you and remembered the last conversation you had. In this most simplistic way, that's it. And If I can, there's one other thing you mentioned in there, which was about talent and what differentiates.

Michael Abbott (10:48):

As you said, many banks have become a sea of sameness. I think the number one differentiator will probably not be technology or any of the things we're talking about right now, but it will be culture. And what I'm seeing is the banks that have a culture of curiosity tempered with execution, I believe are the ones that are going to win because we're all going to need to learn a different way of working.

Jim Marous (11:12):

Well, as you mentioned about culture, part of the culture of most financial institutions is the avoidance of risk. And I've been in banking for 50 years, close to 50 years now, and it's been amazing to know that through that whole time, financial institutions were always afraid about talking to a consumer on an assumption basis.

Jim Marous (11:37):

While Disney will talk to us all the time, assuming the way we're going to walk through their park on an ongoing basis – and while they may make some mistakes, they make so many right moves that you feel very comfortable with them.

Jim Marous (11:48):

Amazon makes recommendations. While they're not always right, and there's examples where they've been very wrong, you get more and more comfortable in them in helping you make decisions.

Jim Marous (11:59):

One of the bigger hurdles I see happening is my major relationships, both on the personal and the business side for me, are with two relatively large top 10 banks. And both of them I know, know a ton about me as a consumer and as a customer.

Jim Marous (12:17):

They have collected data on me from all sources, yet they never show me that they know me. And I think that's out of fear of maybe making a mistake. They may say something that they should know better, but yet my airline relationship talks all the time to me on a really personal level, and starts to use data they've used and says, “I think you're going down this path.” But I can correct them if they're wrong.

Jim Marous (12:42):

Is this going to stand in the way when it comes to innovation, when it comes to new product development, when it comes into agentic AI or communication or engagement, where only the best organization, which may not be the biggest, are going to really take the step to say, “I'm going to be comfortable enough to personalize the relationship and maybe make that small mistake every here and now?”

Michael Abbott (13:07):

Well, Jim, I think it's a paradox that's already there today. Because if you're on the wealth management side, you're already having a conversation with your relationship manager all the time. And they will have a broad-based conversation and go anywhere with you. But when banks to your point, turn that into a digital experience, they lock it down in such a way that you can't go outside of the lines.

Michael Abbott (13:30):

I think solving that paradox or cracking that paradox, allowing these new agentic AI tools to have conversations like you would have with a relationship manager, with inbounds is exactly the things we're seeing banks test right now. How far can you go?

Michael Abbott (13:48):

And there's all these really interesting concepts underneath the generative AI technology, like called temperature. And you can drive the temperature of a model down to zero, which means you can guarantee it's going to have the same conversation every time. A bank will like that, but a person won't.

Michael Abbott (14:03):

So, I think the question is, is how are we going to adjust the temperature of these models to allow them to feel much more personal, or like the RM conversations you have today. And again, the future is back. We want to have the conversations we had 20, 30 years ago that some of us are still having, but the majority of us are not.

Jim Marous (14:23):

It's interesting because when you look at this, one of the other things your report discussed is the fact that platform providers really face an innovator's dilemma.

Jim Marous (14:35):

The banks and their core providers, the relationships is becoming more and more fragmented because there's so many technology vendors out there today that are doing an exceptional job solving for individual problems. Maybe it's a new account opening, maybe it's dealing with customer care on the call center area.

Jim Marous (14:57):

How do you see the role of technology vendors, both the core, but even more importantly, those individual organizations, the FinTech organizations, they're taking care of individual solutions – how do you see those relationships changing over time between let's say the big banks and the smaller banks?

Michael Abbott (15:17):

Yeah, and Jim, you nailed it in that conversation right there, is that many of the technology vendors were built off of, call it quantitative information, solving quantitative problems, deterministic problems in their solutions, and they became very vertical and very specialized. But customers have conversations over channel and products. And they've become disconnected.

Michael Abbott (15:42):

So, what I see happening here is one way or another, either the ecosystem is going to, or the banks are going to bring back a connected experience.

Michael Abbott (15:52):

So, I think it'll be hard, but it'll be simple. Meaning eventually, you're going to have the concept of a digital brain, just like you have with a branch manager, something inside of the bank that remembers you. And then you're going to have something that orchestrates a connected experience across those channels in one way or another.

Michael Abbott (16:07):

And the innovator's dilemma for the ecosystem providers is are they going to be the one that brings that together and makes it simplistic, or are they going to remain in their vertical solution silos and kind of pushed off to the side? And it's a huge question, I think, for the ecosystem.

Michael Abbott (16:24):

And on top of that, because most of the ecosystems have been built off of call it structured data, with generative AI, all the values and the unstructured data. So, if you're an ecosystem provider, you want to be thinking about how do I tap into that 70, 80, 90% of data that's inside of the bank that I'm not seeing right now to make my experience and my product better? And that's where the real value is going to be, and hence the innovator's dilemma that they face.

Michael Abbott (16:50):

What made them successful, being really good around structured data and deterministic may not make them successful in the future when you need to tap into all this unstructured data and information.

Jim Marous (17:00):

Given that, is it possible that … we talk about open banking, and I get the fact that at least in the U.S. a lot of consumers have built their own open banking relationships. I know that I have, where I have different providers that provide different services, and I've combined them to be able to look at them as a whole, as opposed to my bank, which in the UK is much more likely to take on that role.

Jim Marous (17:23):

When you're looking at agentic AI, where you have a digital agent, will the banks be holding that digital agent to help me or will I be forced to maybe make a relationship with maybe a FinTech provider or maybe build it myself, where I actually have an agent that works on my behalf and the banks are closed out of that actual advantage they could have had?

Michael Abbott (17:46):

Jim, your question about agentic agents is I think is a really important one for the banks to ask right now, especially with open banking.

Michael Abbott (17:54):

With open banking now, you can see a future where third parties will develop agentic agents that will build the best bank for you. And so, in this year's report, we talked about the need to move from product silos to inseparably connected products.

Michael Abbott (18:09):

Meaning, that if banks do not bring the products together and give you a reason to keep your deposit account with your savings, with your credit card, with your mortgage, and give you value for the totality of the assets and liabilities that you bring to them, they are very much at risk of being picked apart by agents that will simply build you the best bank going forward.

Michael Abbott (18:31):

So, it is a paradox for the bank. You may be able to build it yourself, but the reality is third parties will build it. And the way to counter that is to integrate your products in such a way that you give the customers no reason to go anywhere else.

Michael Abbott (18:46):

And by the way, when we did this research around the world, we found that less than 15% of the banks provide a customer-centric product model, meaning most of them simply expose their product silos to the customer, exposing them to open banking and to agents arbitraging them in the future. It is a huge product development issue for them.

Jim Marous (19:08):

Well, and it's interesting when you talk about the back office and actually tracking the impact of that. It amazes me how few financial institutions have any idea what percentage of the overall relationship they still hold. They all sit there and feel really good that no customers/there's been very low attrition that's actually gone down over the years.

Jim Marous (19:29):

Well, the reality is, very few people close a major relationship, but they do open a number of other relationships, and we find this in surveys we do across the entire industry. And yet nobody really manage (very few) what's going on in the flow of funds, what's going on from the share of mindset and the whole relationship. And that's very critical because what happens is you're giving a falsehood around the loyalty and the value of the relationship overall.

Jim Marous (19:59):

So, one thing also that your report talks about is that scale seems to be more critical than ever. Does this mean that regional or smaller banks may be at a disadvantage, or going back to our previous question around technology partners, are smaller banks and midsize banks really in a pretty good place against the bigger players when it comes to being able to provide the digital relationship and the digital engagement and experience that the big banks can do?

Michael Abbott (20:34):

Yeah, when we looked at that report, what we realized was ... and when you look at it around the world, when you look at consumer banking, especially commercial banking, which was a big part of that trend – scale's going to matter because you need to be able to follow these large corporates all the way around the world and that side of it. And then brands matter and that side.

Michael Abbott (20:51):

But Jim, we also believe fundamentally that community and small banking has a huge role to play. And if they adopt this technology because it's being democratized and being made simply available, they should have a great advantage.

Michael Abbott (21:07):

And in fact, in many ways, still having a branch in a small town … I grew up in a really small town in upstate New York on a farm, I still have my bank account with the original bank that I had when they gave it to me when I was in kindergarten, and I still keep money in there to this day.

Michael Abbott (21:21):

So, I think community banking has a huge role to play, and I do believe the democratization of this technology will give them a great way to tap into it. But at the same time, on a global basis, scale matters.

Jim Marous (21:34):

Yeah. It does certainly. But it's interesting because we've alluded to this today, but we also talked about it in previous meetings on the annual report is that where the real difference in management spot style leadership comes from, is some of these smaller community financial institutions, they're much more willing to step out there and try new things because they're whole existence depends on it.

Jim Marous (22:00):

But it's interesting because some of these small organizations are doing great things out there in a way that mid-size and large organizations really struggle with because of the layers, but also because of the legacy mindset that really pervades/prevails against everything else that goes on.

Jim Marous (22:17):

So, let's take a short break here and recognize the sponsors of this podcast.

[Music Playing]

Jim Marous (22:24):

Welcome back to Banking Transformed. Today, I'm joined by Mike Abbott, senior managing director and global banking lead at Accenture. We've been exploring the challenges, opportunities, and strategies that will define winners and losers in 2025 and beyond.

Jim Marous (22:42):

So, we were talking a lot about the inner and outer workings of financial institutions and how they're going to change over the next five years.

Jim Marous (22:50):

We discussed how important the AI is going to be to humanize the experience, and how the organizations that succeed are really going to need to dig deeper in the data and provide empathetic and personalized experience.

Jim Marous (23:05):

However, not everything always is peaches and cream, as they say. The report that you developed this year highlights how regulators' efforts to eliminate risk could actually create new risk by pushing activities to non-banks. How should banks respond to this challenge?

Michael Abbott (23:24):

Yeah, and Jim, it is one of the trends that we noticed this year, and especially in the private credit segment.

Michael Abbott (23:29):

So, as regulators have increasingly pushed to kind of eliminate risk in the banking system, banking's like a balloon. It's just simply squeezing it in one place, but it's going somewhere else. And in this case, we highlighted a few things. One is what's occurring in the private credit space, we see also what's occurring in the mortgage spaces both in the U.S. again and overseas, and how these larger transaction values are being pushed outside of the bank.

Michael Abbott (23:57):

And what we're seeing is we're seeing banks kind of accept that the regulators may be diminishing the risks they can take and partnering up. You saw Citibank partner with Apollo on the private credit space in many ways.

Michael Abbott (24:09):

So, I think what you're going to see is you're going to see banks ask themselves the questions, where do I have a strategic advantage? And what you see when we look through the research was, we saw a few places.

Michael Abbott (24:19):

One, in consumer banking, it's highly regulated. It's unlikely that competitors are going to be able to come into that.

Michael Abbott (24:26):

Second, in commercial transactions, small business banking – it's again, highly regulated, unlikely that competitors are going to be able to come into transaction banking. But in commercial lending, you may want to start looking at partnering.

Michael Abbott (24:38):

So, that's where we're starting to see these questions come up. And that's what banks are asking themselves, the question: which part of my business and my profit pools are more durable and which ones are likely to be attacked?

Michael Abbott (24:50):

And I would say the ones most likely to be attacked are the ones where a few people in a spreadsheet can do a deal and the capital markets are emerging in such a way that they can do that lending. But depository and transaction banking is almost unassailable, is our conclusion.

Jim Marous (25:05):

So, as you peel back the layers, as we talk about 2030, we talked about it many times that the experiences will go back to the future. What do you think will be the optimal blend of digital convenience and efficiency and the personal service and engagement? What will that look like in 2030 from your perspective?

Michael Abbott (25:29):

What I believe is, I believe it won't even be a blend, it'll be seamless. It'll be a completely connected experience. So, Jim, if you were my banker, I might be talking to you, generative AI will remember the conversation and when I go to text, it'll just bring it back and forth.

Michael Abbott (25:45):

So, what it'll feel like, is it'll feel like anytime I have a conversation, it'll feel like a continuity of that conversation regardless of what channel I go to after that occurs. And what I believe will happen (and this this may be a little controversial) is you will actually end up talking to people more than you are now. Because what will happen is you'll see this idea of what I described here is waste out value, meaning you will take the wasted part of the processes out that are really non-value add.

Michael Abbott (26:14):

Think of it like a relationship manager filling out forms after a conversation, that goes away, opening up more time for the relationship manager to have more conversations to text back and forth. And we’ll blend those channels together with the humans in such a way that will actually have more conversations directly with people rather than less and more meaningful. I'm an optimist.

Jim Marous (26:35):

It's funny you took the words right out of my mouth. We tend to, near the end of our conversations every year, we start talking aspirational, we start talking on a very optimistic level. You're talking the way you talk to clients, I talk the way I try to recommend to listeners and to followers on what they should do.

Jim Marous (26:58):

In the next five years, what will get in the way of being able to achieve what we both know is not impossible to achieve?

Michael Abbott (27:07):

Culture. And you mentioned it earlier, Jim; the culture of not taking risks, of not being curious, of not trying new things, of not learning how to use Excel in 1980 – if you were in a bank and you didn't learn how to use Excel in 1980, you're probably not around today.

Michael Abbott (27:26):

I think that is the biggest challenge that's going to be out there, is the culture of not taking risks, especially as we come out of the great financial crisis, and we've tried to zero out risk in banks. Banks need to get curious again. That I think is going to be the biggest challenge.

Michael Abbott (27:41):

And I will tell you on a private note – when you look at this, banks that I go into that I know are super smart and just ask me question after question after question, and I know they know more than me, but they ask those questions, Jim, they have the highest price to book ratios.

Michael Abbott (27:57):

The ones where I go in and I give them an idea and they say, “I did that three years ago,” and I'm like well it really didn't exist three years ago, but okay, the arrogance, they have the lowest price to book ratios. Curiosity, I think will win.

Jim Marous (28:12):

Or the belief that the sky is not really falling because we've proven it. We've proven it both of our whole careers. We keep on saying the sky has fallen and it's never fallen. They continue to make money.

Jim Marous (28:23):

So, it's one of these things, what are you going to commit to? And it's interesting because you mentioned the Excel and today, you don't have to learn how to do Excel because the AI tool will do it for you.

Jim Marous (28:35):

But your ability, your prompting skills … generative AI in November of 2022 should have taught everybody, or at least people that are interested, that it's how you ask the questions that's going to determine how well the answers will come out and how close to what the reality will be, will be.

Jim Marous (28:54):

And I'll tell you, every single day I get into ChatGPT or a cloud AI or another AI tool and try to test my ability to ask questions to get the answers I want – I'm getting really good at it, and as you said, what's really nice is the tool learns about what I've asked in the past so that it holds on to what I've learned also, which is really good.

Jim Marous (29:17):

What's challenging and continues to be challenging is it's not just culture, it's complacency. It's the fact that, okay, what's the risk if I don't do it right? Which is what really sets the small organizations apart from the larger ones, because the smaller ones really do feel threatened and they really do internally want to help their members or their customers, I think more than anybody else because they're closer, there's less layers.

Jim Marous (29:44):

But it's going to be interesting because prompting skills, the ability to take the data you have and help people with that … for the tellers, I walk into a branch to take the decomposed and the decentralized insight and they look and they say, “Jim Marous just walked into the branch. We have that because we have the ring around the branch to say who's coming in. I'm going to be able to help him because it's going to prompt me immediately to what should I talk about to Jim right now.”

Jim Marous (30:13):

But there's so many organizations that will simply do transactions in the branch, and we can always already tell that. And some organizations are actually building a culture around, we're going to do banking in the way we've always done it. You're not going to have to worry about risk with us. And I'm going like, "Geez, I'm not too sure if that's what I want my bank to be."

Jim Marous (30:33):

When you look at all of your trends and you look at the banking industry in a mass, what is the single most important action that leaders must take today to position them for 2030?

Michael Abbott (30:53):

I’ll come back to the talent. And I would say if there's one thing that's going to really change is thinking through the future of interactions. Because as we've gone through this digital experience and we've digitized everything, Jim, as we mentioned at the front end of the broadcast, we have outsourced everything to our customers.

Michael Abbott (31:10):

They should be thinking about how am I going to use this technology to change those experiences in such a way that I bring the past back into the future of what I'm going to do? Because it is those relationships and those experiences that create durable brand over time. That's the number one thing I would say you'd want to be looking at right now.

Michael Abbott (31:30):

And it'll drive you into asking your product questions, your tech questions, your op questions, it'll drive you everywhere. But it's the future of how the experience and interaction the bank's going to work. And I think setting a simple bar like interacting with us should be as simple as texting with your friend is not a bad bar.

Jim Marous (31:46):

Okay. And so, I'm going to put you on the spot, but I'm going to give you some flexibility and that's going to be what organizations out there, banking or otherwise, are the furthest along in the whole idea of being able to personalize the experiences, build better engagements, differentiate from their peers.

Jim Marous (32:07):

What are some organizations out there? They don't have to be clients – just as you see it as a consumer, what are organizations that you see, as I said, banking or otherwise, that really seem to get it, they're doing the right things, not just saying the right things.

Michael Abbott (32:21):

Yeah, Jim, I think when you look at that, you look at any of these industries that are very consumer-oriented and whether it be the likes of your Spotifys of the world. Or frankly, when you get into a car and you bring up Google Maps and it says, “Are you driving home?”

Michael Abbott (32:37):

What they've done is they make the technology think for you. They use the technology to help you think ahead and think for you. And those experiences feel like a continuity of conversation over time, space, and everything that you've done. It remembers what you did, it makes recommendations that are highly relevant, and it's integrated very seamlessly.

Michael Abbott (32:56):

As you know, Uber, the app actually changes depending on where you are and what you're doing. They modify the experience, they make it very dynamic, and you don't see it, but it just feels like an extension of you. So, I think these direct, the consumer businesses that have come out of Silicon Valley, in many ways are already setting the bar and are good place to look.

Jim Marous (33:17):

It's interesting. Just as we were talking, I'm thinking what would my answer to that question be that I just gave you? And to me, it's the athletic shoe companies. There are so much competition in the athletic shoes and so many people collect them, and it becomes part of their personal brand.

Jim Marous (33:36):

I know for me, I never would think I'd have so many different types of athletic shoes and shoes in my closet, but it depends on my mood. And what's interesting is they can customize the shoe to my liking, or they'll simply know what I usually like and they'll text me and say, “By the way, we have a new series of things coming out that you may be interested in.” And all of a sudden, I'm looking going, “Yeah, they kind of got that right.”

Jim Marous (34:02):

And they're really good on the customer care. And what's interesting, what used to make them special, how good of an athletic shoe are they is less important than adding that to how much does it reflect who I am as a person. And a financial institution can do that, Uber does that.

Jim Marous (34:21):

Uber, I give the example quite a bit when I visit overseas, how Uber, from my beginning of a pickup an airport to my drop off at a hotel continues to engage with me to get me to do more things that will probably require either Uber Eats or an Uber delivery or an Uber drive to another place.

Jim Marous (34:39):

But it's interesting because it continues to learn as we're engaging. And because we don't always engage, it doesn't always communicate with me, but when it does, it doubles down on that communication.

Michael Abbott (34:51):

Let me try to bring you from sneakers to banking on that exact analogy. I don't know Jim if you've seen it, but now there's companies out there that are building sneakers that they will literally paint them to your feet, personalized, customized one-to-one sneakers that will be built with 3D modeling. You put your feet out there, you go in, and they'll build the sneaker personally for you. I think you need to look into that one.

Jim Marous (35:13):

You got to send me a link to that one. That by itself is a talking point in a conference if nothing else.

Michael Abbott (35:19):

So, you've got that, but then let's take that to banking. Banking should be a product of one. Ultimately, it's the same analogy. We should be getting to the point where, exactly as you say, it feels like the product was customized and built for me. Whether it might be a mortgage that offsets the interest rate based on the deposits you keep in there, that gives you a higher cash back rewards. But all of that should be wrapped in.

Michael Abbott (35:41):

That should be the future exactly like your sneaker example. The problem is right now, we're still selling Model Ts in banking for the most part, we haven't even changed the color.

[Music Playing]

Jim Marous (35:52):

We still dummy it down, and to coin Don Peppers and Martha Rogers from 30 some years ago – we're looking for the one-to-one future. It's very key.

Jim Marous (36:03):

Mike, I appreciate you being on the show. It is a good time of the year and as we talked about before we get on the air, we're going to make sure we do an interim and it'll be a little different type of podcast. We're going to do it on the road as they say, but we're going to keep that a secret. But we're so close to each other this time of the year, we'll make sure we get together before I head up north again.

Jim Marous (36:22):

Thank you so much, Mike, for being on the show again.

Michael Abbott (36:25):

Thank you, Jim. Always a pleasure.

Jim Marous (36:28):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoy our work, please give us a positive review. Finally, check out my recent articles on The Financial Brand and our fantastic research that we're doing for the Digital Banking Report.

Jim Marous (36:46):

This has been a production of the Evergreen Podcast. A special thank you to our senior producer, Leah Haslage; audio engineer, Chris Fafalios, and video producer, Will Pritts.

Jim Marous (36:56):

If you've not already done so, remember to subscribe to Banking Transformed on both your favorite podcast app and on YouTube for more thought-provoking discussions on the intersection of finance, technology, and leadership.