Don't Listen To Your Customers

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At a financial technology conference this week, in response to a question about the state of mobile banking in his firm, the CIO of a community bank said:

“Maybe we’ll be doing something later this year. We surveyed our customers and only 20% wanted mobile banking.”

This comment has so much wrong with it, it’s hard to know where to begin, but I’ll try:

1. It was bad market research. I’m assuming here that the survey simply asked customers if they wanted mobile banking (or how interested they were in it).  If that assumption is true, then the bank violated the number one rule of consumer research: Don’t ask people a question that they can’t answer.

Think back, for a moment, to when blepfards were introduced. Remember what they felt like in your hands? Remember what they felt like next to your skin? Of course you don’t. Blepfards don’t exist. And because they don’t exist, trying to imagine what it’s like to hold it and feel it is a fruitless effort.

This is what I call the blepfard effect:

Asking people to imagine a situation, a state of mind, or something that they can’t possibly imagine because they have no basis of experience to do so.

For people who interact with their bank online, or prefer to avoid the online channel, and continue to use branches and the call center, visualizing or identifying the potential benefits or added convenience of mobile banking is an impossible task. For people who aren’t interacting with other firms using their mobile device — and despite what you might have heard, that’s still the majority — anticipating the benefits of mobile banking is difficult.

2. The CIO should be reprimanded for dereliction of duty. Guess what, Mr. IT Dude: Sometimes YOU have to take the reins and tell customers what THEY need based on your vision of what technology can do for them. My favorite response to an executive who tells me “well, my customers aren’t asking for XYZ” is “yeah, well Apple’s customers didn’t ask Steve Jobs for the iPod.”

Here’s another thing I’ve done at conferences when this subject comes up: I ask audience members to raise their hand if they drive car. Pretty much everybody raises their hand. Then I ask “how many of you pump your own gas?” Pretty much everybody raises their hand. I follow that with “and how many of you wrote letters to Exxon, Mobil, etc. and told them you’d prefer to pump your own gas? And, of course, nobody raises their hand. You CAN get consumers to change their channel behavior. You can use the carrot or the stick, different tactics will work in different situations.

If it’s better for you — as mobile banking promises to be for banks (not to mention consumers) — then sometimes you have to WORK AT DRIVING ADOPTION. Novel concept, eh?

3. 20% — in and of itself — is not an adequate decision point. I have no idea if the 80/20 rule holds true for bank customer profitability. If it does — and if the 20% that wants mobile banking is the 20% driving 80% of your profits, then are you really sure you want to dismiss an initiative because “only 20%” of the customers you surveyed want it?

And what about the customers you want to acquire but don’t already have? Did you think to ask THEM what they wanted? If 80% of Gen Yers consider mobile banking a major criteria for selecting a bank — and if Gen Yers are a segment of consumers you want because they represent a disproportionate percentage of demand (compared to the percentage of the overall population they represent) — don’t you think you should offer mobile banking?

I’ll tell you a little story: Back in 2002 (maybe it was 2003), I wrote something for the analyst firm I was working for at the time that argued that banks should not be investing in mobile banking at that time. My argument was that there were higher priorities to focus on.

A colleague of mine wrote something with the exact opposite opinion.

The CIO of a large bank flew us both down to his office, and in front of his management team, had us each present our case. I won (I guess), since the bank discontinued their mobile banking investment, and a year later, I got an email from him thanking me for convincing them to stop investing in mobile banking because it saved them millions of dollars, with absolutely no negative impact on customer satisfaction or retention.

Fast forward to 2011 and the situation is very different. The rapid adoption of smartphones will drive demand for mobile interactions and transactions (not just in banking but across a range of industries), and — perhaps more importantly — will create opportunities for banks to develop apps to add value in ways they can’t do in other channels (I like to call these “purely mobile” apps).


Taking a pass on mobile banking because “only 20% of your customers” want mobile banking is short-sighted, and, I might add, a bad management decision. For g*d’s sake, don’t listen to these customers.

Oh — and please don’t try and tell me how your customers don’t want PFM.

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