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Digital banks are led by clear customer-obsessed principles

Another key factor of the digital banks I’m talking to is that the customer is their primary focus. Not the shareholder, the investor, the quarterly bonus, the dividend yield or the cost-income ratio. The customer.

This is something I’ve found quite rare in most banks, as the retail customer is deemed fairly unimportant in the scheme of things. The high net worth ones are worth it, and the mass affluent, but the general mass of the rest is treated with a fair bit of disdain. They are charged high fees for accidental overdrafts and generally pay more for bank services than the rest (who get free banking).

So hearing a passion for retail customers and their experiences and services is pretty unusual in my book. In fact, I was talking with one digital bank’s Chief Financial Officer (CFO) and she was recounting how important the customer is in the scheme of things. I said that I found it really unusual to hear a bank CFO talking in such a way, as usually their focus was on shareholder value, not customer value.

She retorted you get both. If you are customer and user experience focused, then the profits flow and the shareholder’s get their return. She then pointed out direct correlations between customer value using digital services and shareholder value that flows in return. She told me that customers that use the bank’s services digitally more than half of the time are twice as profitable as other customers, and twice as satisfied.

It seems unusual, but I can see this direct correlation in the digital banks I am talking with. What happens is that in the relentless pursuit of delivering the best digital experiences possible for their customers, they end up customer obsessed in the same way as Amazon.

In fact, it builds upon my blog of yesterday about setting people free. In order to do that, you need to have a clear way in which people can work. Then set them free.

It is interesting in that free staff are happy and happy people make happy customers makes happy business. I’ve used that mantra for years, ever since the CEO of a small insurance company explained that this was his aim. Happy people make happy customers makes happy business.

So how do you get happy people?

Empower them and set them free and, in order to do that, you need clear principles. This is another emerging common factor in the digital banks I am talking to: they are principles-led businesses. They communicate with their people in a clear way, and say this is our aim in business and, as long as we all work this way, we will all succeed.

Again, Amazon is a clear influencer in this space. Amazon has a 14-point list of principles that are embedded into the fibre and being of the company and every employee in it. If you didn’t see them before, here they are*:

Whether you are an individual contributor or the manager of a large team, you are an Amazon leader. These are our leadership principles and every Amazonian is guided by these principles.

Customer Obsession
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say “that’s not my job.”

Invent and Simplify
Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here.” As we do new things, we accept that we may be misunderstood for long periods of time.

Are Right, A Lot
Leaders are right a lot. They have strong business judgment and good instincts.

Hire and Develop the Best
Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others.

Insist on the Highest Standards
Leaders have relentlessly high standards – many people may think these standards are unreasonably high. Leaders are continually raising the bar and driving their teams to deliver high quality products, services and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.

Think Big
Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.

Bias for Action
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.

We try not to spend money on things that don’t matter to customers. Frugality breeds resourcefulness, self-sufficiency, and invention. There are no extra points for headcount, budget size, or fixed expense.

Vocally Self Critical
Leaders do not believe their or their team’s body odor smells of perfume. Leaders come forward with problems or information, even when doing so is awkward or embarrassing. Leaders benchmark themselves and their teams against the best.

Earn Trust of Others
Leaders are sincerely open-minded, genuinely listen, and are willing to examine their strongest convictions with humility.

Dive Deep
Leaders operate at all levels, stay connected to the details, and audit frequently. No task is beneath them.

Have Backbone; Disagree and Commit
Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

Deliver Results
Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.

Interestingly, the digital banks I’m meeting are taking the best of Amazon, Netflix and other big tech giants and trying to make that the core of their being and, you know, I kind of think it’s beginning to work.


* Postscript: not everything at Amazon is great, as I also hear they treat their warehouse workers fairly badly but hey, do you believe everything you hear?

About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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