Last week I had the privilege of attending the American Bankers Association National Conference for Community Bankers. Over 1,300 bankers, spouses, exhibitors, friends and staff participated in this outstanding event. The theme, “Banking in a Brave New World,” focused on cybersecurity issues and on product and thought innovation. The cybersecurity discussions seemed particularly timely, given that one week prior, Anthem Inc., the second largest provider of health insurance products in the United States, had announced that it was the target of a massive security breach that could compromise the personal data of 80 million individuals. I have written before about cybersecurity concerns and the potential for serious, inestimable damage that may be wrought over the next several years, until government and business can collaborate to find solutions and bring the perpetrators of such crimes to justice.
What I have not spent much time writing about is banking innovation. Frankly, seeing this topic appear on a conference agenda was encouraging. We have expended so much energy in the past several years dealing with the financial crisis and inappropriate responses to it, that we have not been looking to the future. Giving innovation a prominent role in this national conference seems like a turning point for the community banking industry. It made the statement that we have survived the past, and now it is time to focus our attention on improving our performance for the future. It is truly a welcomed change.
There is no doubt that bankers must begin to think about what products they need to provide for the customer of the future. Much time and attention has been devoted to the emerging millennial generation, which this year will surpass the baby boomer generation in numbers. But what products and services will millennials need and want? Have competitors from technology companies swooped in during the past few years to capture much of this generation? If so, what can banks do to earn the business of these consumers in the future?
One speaker, Seth Godin, was particularly honed in on these issues, but not from a traditional business approach. Godin is a best-selling author and marketing provocateur, and has been dubbed “the ultimate entrepreneur for the Information Age” by Businessweek magazine. Urging attendees to think creatively, he shared examples of fresh thinking about product development and marketing. Godin suggested that community bankers must be creative in order to succeed in the future. Case in point: He told the story of a group of innovators who one day were discussing different ways to change up how things were being done. One person asked why socks were sold in sets of two, when socks are so easy to lose ‒ leaving behind a mismatch. The obvious answer, even for this group of innovators, was because we have two feet, and the idea was readily dismissed. Yet the questioner couldn’t let go of the topic, and he began to play with the idea of creating a package of three socks, intentionally mismatched. He conducted market research and found that “tween girls” ‒ ages eight to 13 years old ‒ actually enjoy wearing socks that do not match and would be likely to buy them, mismatched but coordinated, in sets of three. As a result, the appropriately named LittleMissMatched company was formed in 2004. Not only did the socks sell well, but product offerings have expanded into other mismatched inventory such as clothing, bedding and accessories. Crazy idea, huh?
As bankers, we are often closed to the very ideas that could set us apart. Much of the conference last week was about the need to set ourselves apart in order to rise above and prosper into the future. Well done, and thank you, ABA!
– S. Joe DeHaven