The bank remains essential for any company. But, less and less, it is the place where decisions happen.
Today, a businessman can check his bank balance daily, but it is likely that he manages his sales on an e-commerce platform, monitors cash in financial software, organizes charges in another system and monitors his operation through specific management tools.
The money continues to pass through the bank. Business management, however, takes place elsewhere. This change seems subtle, but it carries an important strategic implication for the financial sector.
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When a financial institution stops participating in the customer’s operational routine, it loses access to the context that guides their choices. And, in an increasingly data-driven market, context is worth more than transaction.
The challenge of relevance
For decades, the banking relationship model was relatively stable.
The institutions concentrated essential services such as current accounts, payments, credit and investments. The greater the participation in these products, the greater the proximity to the customer.
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The digitalization of the economy has changed this dynamic.
According to a survey by IDC, companies use an increasing number of digital applications to manage their operations, creating increasingly fragmented environments. The result is that critical business decisions now take place on multiple platforms, many of them outside the banking environment.
This fragmentation brings a new challenge.
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When the bank stops monitoring the customer’s daily operations, its ability to understand future needs decreases. Without this vision, it becomes more difficult to anticipate demands, offer solutions at the appropriate time and participate in decisions that generate value.
The risk, therefore, is not losing a transaction. It’s losing relevance.
O surgimento do Beyond Banking
Often treated as an innovation or portfolio expansion agenda, Beyond Banking is in reality a strategic response to a change in customer behavior.
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This practice occurs when the financial institution stops acting solely as a provider of financial products and starts to integrate activities that are part of the daily operations of its customers.
In practice, it means connecting financial services to management, billing, invoicing, cash flow, customer relationship and performance monitoring tools.
But the central point is not the amount of resources available. It lies in the ability to be present when the decision happens.
When evaluating its cash flow, a company projects the need for working capital, or identifies a drop in sales, and the relevant decision takes place at that moment. The organization that participates in this process occupies a much more strategic space than the one that emerges only when the customer decides to take out credit, invest or make a payment.
The new competitive logic
This transformation profoundly changes the way financial institutions compete.
Historically, the dispute was based on factors such as rate, term, credit limit or profitability. These attributes remain important, but are no longer sufficient to guarantee sustainable differentiation.
The new competition takes place based on the frequency of interaction.
Those who participate in the customer’s routine generate more points of contact. And those who expand these points of contact better understand the behaviors and needs of that business.
Those who generate more points of contact better understand the behaviors and needs of that business. And those who have this understanding increase their ability to offer solutions that adhere to the context of each company.
A virtuous cycle is thus formed. More relevance generates more usage. More use generates more information. More information expands knowledge about the customer. And this knowledge strengthens the ability to generate value over time.
Three moves for financial institutions
To advance this agenda, three movements seem fundamental.
The first is to integrate what is still fragmented. Banking services need to connect more naturally to the tools that customers use to manage their businesses.
The second is to transform information into practical guidance. Isolated data has limited value. The difference is in converting them into recommendations that help companies make better decisions.
The third is to build a consistent experience across all channels. For the customer, there is no separation between physical and digital. There is just a simple, integrated, fluid relationship expectation.
What changes for leadership
The discussion about Beyond Banking is not, at heart, a discussion about technology. It’s a discussion about strategic positioning.
The financial sector spent decades competing for space in the movement of money. Now, the dispute takes place in a different territory: managing customers’ routines.
Institutions that understand this change will be able to increase their relevance and strengthen long-term relationships.
Because, in the end, the bank that participates in the operation participates in the decisions. And those who participate in decisions tend to also participate in the results.
