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The 11 P’s of Banking and 4 P’s of the Banking Mix

When I was growing up with learning management skills, one of those I focused upon was marketing and Kotler’s 4 P’s. If you’re not familiar it’s all about product, price, promotion and place. It’s something easy to remember, but then most folks are hard pushed to remember more than three things.

That’s a shame as I worked out that today’s banking is worth about 11 P’s:

  • People
  • Purpose
  • Problem
  • Process
  • Platform
  • Partnering
  • Personal
  • Predictive
  • Product
  • Price
  • Promotion
  • Place

In other words, the original 4 P’s remain. They are a bedrock and still very much the core of every organisation’s capabilities to deliver. But there are more. Therefore, in the spirit of updating the world for 2020, here’s my 11 P’s.

People

AI, machine learning, software eating the world, ecosystems and all that stuff is all well and good, but what is it there for? People. Customers are people as are employees, investors, the community and all other stakeholders. How are you rewarding your stakeholders, your people, in what you strive to achieve? Are you augmenting staff, servicing customers well, delivering results and looking after the world? These should be drivers of strategy and strongly relate back to purpose and process.

Purpose

What does your company stand for? Are you clearly taking a stance on something? Anything? Or do you just stand for nothing but profit and shareholder return? I know I’ve blogged about this for a while, but the success of firms in the next decade will be determined by what they stand for. If you stand for nothing, why are you here? Purpose is what people relate to. Sure, they may like your product or service, but if you stand for something they can relate to, then you become meaningful in their lives, not just a product or service.

Problem

The industry is always facing a problem, a crisis, an issue somewhere, something that needs to be fixed. Today, the one problem we are all dealing with is the global pandemic and the thing we all should have learned from the pandemic is how people relate to technology. For every problem, there is a solution; for every mistake, there is an education; for every failing, there is a learning. We now need to deal with working from home and shopping from home. In fact, we need to deal with doing everything from home for the long-term. For example, imagine this lockdown world lasts forever: what would your business look like? In a lockdown world, the only companies enjoying any sort of success are digital firms. The more digital the better. The more capable of reaching the home and the home worker the better. Amazon, Zoom, Netflix and such like are all booming. This is the digital age. If you’re not ready for a lockdown world forever, you’re not ready. Is your business truly digital? The pandemic is that test.

Process

Everything today is about processes. Processes are locked into plug-and-play code. Processes are automated via APIs. Processes are integrated into apps. Processes are dealt with by specialists. Generalists who do all processes no longer win; specialists integrated into experiences win. How process-structured is your business and how geared up for process partners are you?

Platform

Recognising the institution has to be truly digital, people-obsessed, process-structured and purpose-driven can only be delivered by working with partners in an ecosystem of open technology structures on the internet. That’s what platforms are all about. Some control platforms – Amazon, Alibaba – and some think the platform cannot be controlled, it’s just the internet. Whichever your view, you cannot work without the network and the network effect. That’s why the platform is all about: doing little internally but getting it leveraged externally through the network. If you don’t get platforms, you don’t get business.

Partnering

This is a key part of process-structured and platform-based. If you’re not looking actively to find the best-of-breed partners out there who can deliver the ultimate and best customer experience, then you’re blind. There are 1000’s of companies doing one thing brilliantly well as an app, API or analytic and a bank could never develop code, services, processes or experiences that are better … and yet they try. As I keep saying, one thousand companies doing one thing brilliantly well will always beat a bank doing a thousand things averagely. But partnering is a difficult skill in itself. Too often, the bank thinks it is the major and the partner the minor, and yet no partnership works if it’s not equitable. When you think of partnering, think of your own partner at home. Are they lesser than you? If you think they are, then your partnership will not last. The same is true here in banking and commercial partnerships in general.

Personal

For years, I’ve spent time immersed in the world of Don Peppers and Martha Rogers 1:1 Marketing, and Joe Pine and James Gilmore’s Experience Economy. A quarter century later we are still ways away from that dream in most industries, especially financial services. Most banks are still pushing product through channel via old media; we need to pull customers through messaging via new media. We need to be relevant and you can only do that at the personalised level of service and digital delivery. It’s also why purpose is so important: can the customer relate to what you stand for? Do you stand for anything?

Predictive

Recognising that AI and machine learning can augment customer and employee productivity and process, a key will be to work out how to use such services to be proactive. It is also how you personalise. You can only personalise by analysing and leveraging data at the individual level of eery customer, and using that data analytics to predict what the customer needs. My favourite example of this today is how some challenger banks analyse spending patterns to provide personalised offers. That’s a simple thing to do today. Tomorrow, it needs to be something that’s happening non-stop and recognising who I am and how I behave to predict what I need through my data. Without personalised and predictive servicing, an organisation won’t survive. For example, think about competing with Amazon’s use of data: is you company as good as that? And they’re a legacy organisation!

Finally, we go back to Kotler’s 4 P’s: product, price, promotion and place. These still hold true too and, just in case you’re not familiar with them, here’s a good succinct write-up of The Marketing Mix:

Product: The goods and/or services offered by a company to its customers.

Price: The amount of money paid by customers to purchase the product.

Place (or distribution): The activities that make the product available to consumers.

Promotion: The activities that communicate the product’s features and benefits and persuade customers to purchase the product.

Finally, I would add a twelfth P, but this one is actually a backdrop to the other 11 and has to be there all of the time: persistency.

This one occurred to me through writing Doing Digital and all the other things that are in the mix. Persistency is a key and critical factor underlying all of the above. Most managers, leaders, management advisors and books lack the fact that there must be a dogged persistence amongst the organisation and its key people to deliver any of these factors. Without persistence to see things through – and, of course, change them as you go along – nothing every happens. The persistency to deliver and see things through to the end is also a key factor here.

In summary, banking should focus upon the P’s but, specifically, on 4 P’s that I will call The Banking Mix:

Purpose: what does the bank stand for?

Process: are we structure in end-to-end processes that are as automated as possible?

Platform: can we deliver processes using best-in-class technologies from the partnering ecosystem?

People: continually strive to help customers and employees do what they need to do better

About Chris M Skinner

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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