Banking on Digital Growth
Banking on Digital Growth

Episode · 1 year ago

14) #ExponentialInsights: The 3 Steps You Must Take to Prepare for the Future of Work w/ Jon Ogden

ABOUT THIS EPISODE

Not too long ago ATMs were poised to end bank teller jobs…

But they ended up creating more. 

With a history of failed predictions like this, how do you prepare for the ever-changing future of work? 

In this episode, I catch up with Jon Ogden, Head of Strategic Content at MX, and he shares 3 steps every financial brand can take to future-proof their business… 

No crystal ball required.  

Jon explained:

-The history of failed predictions concerning the future of work

-The 3 steps you need to take to prepare for the future of work

-Specific areas financial brands should focus their attention on

You can find this interview, and many more, by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

The three steps would be to commit to live your mission, to evolve your culture beyond a legacy mindset and to invest in technology that will position your institution for the future. You are listening to banking on digital growth with James Robert Lay, a podcast that empowers financial brand marketing, sales and leadership teams to maximize their digital growth potential by generating ten times more loans and deposits. Today's episode is part of the exponential insight series, where James Robert Interviews the industry's top marketing, sales and FINTECH leaders, sharing practical wisdom to exponentially elevate you and your team. Let's get into the show. Greetings in Hello, I am James Robert Lay, and welcome to another episode of the banking on digital growth podcast. Today's episode is part of the exponential insight series and I'm excited to welcome John Ogden to the show. John is the head of strategic content at Mx. Hello, John, hi, so thanks for joining me for today's conversation. One of the things that I'm curious to know is, as we get started, what is one thing that you and the team at mx is working on right now during these dynamic and ever changing times. One thing that we're working on is a product called puls and pulses essentially like a financial feed for the end user. So a banker accreditating order or a fantet company might offer it to their customers, and then the end user would be able to see in real time what is happening with their finances, get nudges to help them see how to manage their money better, and they might also be able to they would also be able to see financial advice that is personalized to them, and so it really is like an automated financial guidance tool that banks and creditings and fintet companies can use to empower their customers to be financially strong, which in today's environment, is more important now than ever before for a financial institution to position around that perspective of strength, of courage, of confidence. For context, you're working with pulse to provide nudges, behavior changes, modifications to empower someone. For context, can you take a step back and just paint the larger picture of what mx is doing in the industry? Sure so. Mx focused on data and we help our clients bring in an aggregated view of their end users so they can see a three hundred sixty degree view...

...of their finances allowing place. And then we help our clients use that data to again empower the and used to be financially strong, but to also help our clients use that data to understand their client their customer base, and to create hyperpersonalized offers for their end users, to do a variety of things really yeah. So, so if they have the data, they can do a lot with it. Yeah. So, if I was a take that, it's essentially you're simplifying the complexity of data to provide both actual insights for a financial brand but really, more importantly, actual insights for the consumer to make their life even that much better, because money is a very stressful situation. It's very complex in and of itself, kind of like data is to financial institutions, money is to people and people are looking for clarity. So with pulse, with MX, you're providing clarity into complexity. Is that a fair summary? Yeah, it is. Our mission is to empower the world to be financially strong and we help to simplify finances for the end user and then those benefits are really monumental for our clients as well. I like that empower the world to be financially strong, because there is such a strong correlation between a person's financial wellbeing, their physical wellbeing and their mental wellbeing. And in this environment it is confusing, it is complex, it is overwhelming, and so let's transition the conversation to talk about this environment really from two fronts. Number One, will take the approach of the future of work, which is a really an indepth guide that you've written for financial brands, and then number two, how does the future of work impact the future of banking? So let's start with the future of work, because with within the last few weeks, since we've all been exposed to this covid nineteen crisis, work will never be the same again. Will never go back to what the world was before, will never go back to what was considered once normal. We're only going to create a new normal going forward. In your viewpoint, what does that new normal look like, based upon what you've written about and then also what you're seeing in the in the environment today with the future of work? That's a great question. I'll start big picture and then get into practical tips as I go on. I also share some of the original consumer research that we've done for these ultimate guides. So, big picture, it's about how work...

...evolves and we should expect work to continue to evolve. So for hundreds of thousands of years humans were hunter gatherers. You know, about tenzero years ago we started the a agricultural revolution and then that continued through to pretty recently, known the past two hundred years, a minority of people were doing farming and now it's around two to five percent. And Yeah, I know you wrote in the Guide fifty five to seventy five percent of Europeans still worked in agricultural are farming as recently as six hundred years ago. So we're moving through. Continue to paint this picture for me, please, because we're moving through these different stages of of work as a whole. Yeah, and then in since the s now, the percentage of knowledge workers has grown tremendously. It's grown two hundred thirty percent since nineteen that since the early S, and so work is becoming completely different thing than it has been in our history. And there are a lot of predictions and assumptions that people have made based on this trajectory. A lot of them have been wrong. A few that I'll mention John Maynard Canes Roe Nineteen thirty, that he thought that modern innovations would we all in a fifteen hour work within two fifteen hour work week. We didn't quite end up with that, though. Work weeks have a number of hours in each work week has decreased, just not to fifteen hours. One needed crabs, who's an economist and ECOMMERCE secretary under Jimmy Carter, predicted in one thousand nine hundred and seventy that the rise of computers would enable people to retire at the age of thirty eight. So also, I'm true, I'm still I'm still looking for that myself. Yes, same. And then when it comes to banking, in the early s a lot of exports thought that ATMs would replace tellers, and even in the New York Times they said it would be up to seventy five percent of tellers would be replaced. Now this hasn't happened. Z anyone works in banking nose to some degree. Instead, teller jobs have grown slightly faster than the general labor force. MMM, so we now? I've nearly half a million ATMs but nearly the same number of tellers. A teams have our place humans, and the reason for this is pretty interesting. So ATMs reduced the number of tellers needed per branch, so went from two one hundred and thirteen and the average urban branch. But that reduction made it cheaper to build branches. So because it was cheaper to build branches, therefore, then banks and credings built more branches and then hire or tellers overall. And the same thing happened in textiles. Automation the same thing is exact...

...same thing. It automation made getting are making close cheaper, but that caused more people, more demand for clothes, which cause more people needed to be needed to make those clothes. So there's an interesting play there between automation and the number of people employed and I think it has pretty big implications and banking itself. If people are wondering, am I going to lose my job or not? So it's almost like a chicken or the egg. What came first? What's driving all of this? And to summarize, you know, we've gone through these different economic work cycles, agricultural, industrial, technological. We're moving into the age of AI. We really move beyond from a service economy to what some might argue to be an experience economy, but I'm pushing that conversation Ford further. You mentioned the knowledge work or the knowledge economy or something that I'm calling the expertise economy. Will work is not necessarily about what you do, but it's about what you think or the value that you create through your thinking or the insights just you're able to distill, almost kind of bringing this conversation full circle, simplifying the complex. Sure, yeah, absolutely, there's a lot of value and being able to do that. Yeah, so that's that's that's the stage. Let's talk about where where we can go with the future of work, because you've detailed and laid out three almost a three step road map of actions that a financial brand can take when it comes to the future of work. Sure that banks can take specifically. So this is in the ultimate guide to the future of banking and it the three steps would be to commit to live your mission, to evolve your culture beyond a legacy mindset and to invest in technology that will position your institution for the future. So let's talk about committing to live your mission. This is an area I find many times there are gaps through the diagnostic work that we do. An executive team, a board of directors might feel that, you know, we're on this mission, but the mission might be self serving and might be clinical, it might be legacy. So there's an opportunity to stop, pause, think and and what are those opportunities from your perspective, when it comes to the mission of a financial brand or the purpose of a financial brand, what idea that I think is pretty convinced compelling is to hire or just make the position of an internal anthropologist, so somebody who, whether it's employees you already have or employees that you hire, you want to get a very clear, as objective as possible sense for what how your institution is actually measuring up to...

...your mission, because it's one thing to have a mission statement or to talk about high values and a completely different thing to actually live that mission. And so one way to do that is to have people who are observing whether you're accomplishing that in your organization, as an anthropologist would sitting back and seeing. Okay, we say that we are about we put our customers first. Well, let's just look at whether that's true. Is it true in the branch? Is it true on Mobile? Is it true on our digital banking portal? Is it true in our customer service, you know these these employees would be able to listen in and just observe what's happening right get a very clear sense for what is because you don't want to be deluded into thinking that you're accomplishing your mission if you're not. I love that. Digital Anthropology, the study of people and the connection between people and technology. I know Brian Soulis. He's written a lot around that perspective of digital anthropology. It's almost like what we say and what we do or what we believe, does that translate into what we say or communicate, and then does that held up by what we do or how we act, how we deliver on the promise? So purpose in forms the process, the why informs the how. I like that very, very practical when it comes to committing to live the mission digital anthropology. The second point you recommended is evolving beyond a legacy mindset. I truly believe mindset is exponentially more valuable than technology, because you can have all of the technology, you can have all the tools, but if you don't have the mindset to capture the opportunity to take advantage of the capabilities full advantage of the capabilities. Then you just have a tool. At the end of the day, what are the opportunities for a financial brand and their teams to evolve beyond a legacy mindset? And what's holding the back? You know it's holding the back is there is some wisdom in those who are holding the institution back, and that wisdom is hey, we should be cautious. There's wisdom in that. That said, too much caution can be paralyzing, hmm. And so one of the things that, man, it's fine, real valuable about what we offer is that we not only provide the technology, but we also help them evolve from a legacy mind set in a way that is still secure, because we acknowledge that that that that position of wanting security and safety is valid and we're not riding that off completely say that's a bunch of nonsense.

Just get with the times, you know, and we have empathy for that position very much. We're saying you, you really do have to evolve. A lot of these institutions don't know exactly how to do that and so, in addition to provide a technology, we all sepoy guidance to be able to do that. One of the reasons that people really have to evolve, and this is one of our survey findings, is that we do these surveys of a thousand random US consumers and most of her lptimke ads, and one of our findings was that eighty six percent of US consumers say they interact with their financial institution by a digital channels more frequently than physical channels, and the rate at which people do it is far higher than they come into the branch. Let me look at the exact percentage here. It was more than eighty percent say the use mobile banking at least weekly and more than half say they use it every one to two days. So eighty percent. So that with mobile banking. But when we asked about branch visits, only eighteen percent said they would visit it, visit a branch in a week. And so this is the reason why the legacy mindset is really so urgent, because people are moving quickly to mole we've even seen this. We asked this question in two thousand and fifteen to two thousand and twenty now, and the the rate of people adopting mobile has really grown fast, and so there is a sense of urgency around adopting this legacy mindset that I think a lot of institutions are clued into, but they might not know exactly how to go about evolving that mindset. Technology has transformed our world and digital has changed the way consumer shop for and buy financial services forever. Now consumers make purchase decisions long before they walk into a branch, if they walk into a branch at all. But your financial brand still wants to grow loans and deposits. We get it. Digital growth can feel confusing, frustrating and overwhelming for any financial brand marketing and sales leader. But it doesn't have to, because James Robert wrote the book that guides you every step of the way along your digital growth journey. Visit www dot digital growthcom to get a preview of his best selling book banking on digital growth, or order a copy right now for you and your team from Amazon. Inside you'll find a strategic marketing manifesto that was written to transform financial brands, and it is packed full of practical and proven insights you can start using today to confidently generate ten times more loans and deposits. Now back to the show. So there's a lot of parallels here with the way that we're thinking, because what I view is what I call the circle of chaos, and that is where the environment, the competition, consumer behavior changes at an exponential rate and that's been sped up, probably more so since the COVID nineteen crisis.

It's almost forced us into a take a proactive stance, because if we're still reactive, we're going to get run over. But but to your point that we got to have empathy, we need to have respect, but what guide us to the point, to where we are today, will not get us to where we need to go tomorrow. And Digital Darwinism is a very real thing. The retail apocalypse is a very real thing, which, coming back to your point about what drove branch growth. Was it people, was it people consumer behavior, or was it automation and cheapened or reduce the cost to build these physical locations? So, being very congresses of these facts, I think what what you talking about is key. Not only can we provide the technology in the tools, but will provide, number one, the guidance. We're going to take your hand, we're going to walk you through this. Number two, we're going to hold you accountable because, just like money, is confusing and complex. This idea about technology and data is complex. Having someone to hold your hand makes it a little bit less scary. It reduces the fear of the unknown, it reduces the fear of change. So that brings me to the next point, because we are talking about technologies, tools and you mentioned investing in technology that will position your financial brand for the future. I mean there are literally thousands. There's been a CMO report. There's now over, I think, seven thousand marketing technologies alone available to a brand. That's not talk talk about data technologies. Let's simplify this, let's let's distill this down from your perspective. What are the key technologies a financial brand shout hone in on and limit the noise or the confusion. So, when we asked consumers what they wanted most from their financial institution, the first the most respondence. Thirty nine percent respondent said that they were what they wanted most was the best rates. The second, however, was twenty five percent the best digital experience, destop a mobile. So some financial institutions might not be able to do much about rates. They can, they can try their best, but they might be kind of stuck there. So if they can't, if you can't one all rates, or if you're doing the best you can and rates, then the next thing to do is to focus on the best digital experience. destop a mobile immediately after that was the best stomer service, and that really is becoming more and more intertwined with the best mobile and destop experience, where people want the ability to if they are in and a digital experience, to quickly get to a human via that digital experience and vice versa, to be talking with somebody on support and get help in the digital on...

...their digital view as well. So this is really where it's critical to focus especially because, as as I said, eighty percent of customers are are getting on their mobile device, the mobile banking device, at least weekly. There's no other channel that is close to that. So they're really tuned into mobile and so if if I were to suggest one area to really focus in on, it would be mobile banking for now, with an eye to future technologies. You don't want to get locked in a in a digital experience that isn't able to evolve with you. This is that we find that we are very adamant about. At Mx are cross platform framework is built in such a way that we're able to evolve as new technology comes about. We don't get our clients stuck in contracts where, when a new operating system comes out or a new device comes out, they can't move forward. So it's about you. Yeah, it's so it's a bit more of an agile approach, being able to look at new environmental conditions, new consumer conditions, new competitor threats and being able to adapt and evolved, because you talked about those three things, rates, experience and service, but focusing primarily on experience and services, something more that a financial brand can control. Once again, bringing this full circle back to the purpose or the mission of the financial brand. What you believe or what you think, how you communicate that and then how you deliver that through these experiences, experiences being nothing more than well defined systems and process as that have been defined, applied and optimize over a set period of time, resulting in one of two things, a positive emotion or a negative emotion. It's the ultimate question. Coming back to digital anthropology, taking the mobile banking experience, talking to consumers, how does this make you feel? Do you feel like you can trust this? Do you feel like you're getting value? From this experience, if we're going to look at that lens of experience and coming this bring this back to the future of work. One of the things that you wrote about in the future of work that I thought was really critical was around the need to upskill or reskill workers. Yeah, we talk to me about that because I know there's so many people. I hear this when working with financial brands. Well, what about my job? Well, but only three were sent of CEOS from your research you noted are, I think it was actually as a centure. Only three percent of bank executives were planning to significantly increase their investment in reskilling their teams in the next three years. That's a problem. Absolutely, it's a problem. So the conversation around this topic is it's not exactly clear to me yet whether these jobs are going to...

...be lost or not, because there are. There are like just to briefly recap some of the studies that have been done, like one ox one study from Oxford said that they put the likelihood that teller's loan officers and brokerage clerks, they said the likelihood of those jobs being automated is ninety eight percent within the next decade and then others say no, it's more like nine percent or five percent. We're depending on the job. And then others say no, in fact, like Jamie diamond, he says people are massively overacting to the fear of automation. My guess is that head account will go up and the next twenty years, not down. And then another point that somebody has made is they said they studied the occupations I have been eliminated by automation since the nineteen since nineteen fifty, and they said that of the two hundred and seventy one occupations listed in in the nineteen fifty census, only one, elevator operator, had been rendered obsolete by automation by two thousand and ten. And so there's a bunch of disagreement, but I think the thing that we can keep in mind is that whatever happens, whether these jobs are elimitated or not, the one thing that we can hold for certain is that they're going to change. Yeah, the jobs are not going to like the jobs are not going to look the same ten years from now, five years from now, twenty years from now, and so this reskilling really is essential and it can be difficult again to know exactly how to go about doing the reskilling. One example that I'll share, just to get into specifics, is we have a program called Finn Strong, and it's like financial education, HMM, and one position that we take is that it's going to be more important going forward than ever for employees in financial services to have a solid understanding of what it means to have financial strength for themselves and for their customers. Yeah, yeah, start with the employees, to get all of the employees and an institution really clear about how to develop financial illness and financial strength, and then they are reskilled in a way that they can talk to customers about how to become financially strong on the front lines. That right there, that is gold. I can think of one examples. Sun Trust, which is now soon to be truest financial when they launched their on up program back in twenty, I think it was two thousand and fifteen, two thousand and sixteen, not only did they go consumer facing, they went employee facing with their on up program to me, this presents one of the greatest opportunities for financial brands as new roles are...

...created. Number One, the digital cells team to filled all of the incoming leads. Number two the digital money coach, the person that can provide guidance, accountability, there's that word again, to help someone modify their behaviors. And so, to Jamie diamonds point, we're probably going to be hiring more people just with new skill sets, because this is a like a human to human business, but the way that we connect is just through these digital technology. I think, coming back to your previous point, when you're talking about mobile banking, experience and service, if I have a question, it makes me feel good sometimes it's still be able to raise my hand and get in touch with another human being. Ais Nice. Automation is is nice, but every now and then I still want to like talk to someone flesh and blood. Is Am I. is my thinking sound with that? If I was a CEO and say I still think we need a human component? Yes, yeah, as long as the technology enables them to get to that person quickly but then apposit on hold or through a phone tree for a long amount of time. Yeah, I think that there are things, especially with financial guidance, where an institution can really lean in and develop that long term brand loyalty. Yeah, I'm caute bank is doing this the very, very well with their their digital video mobile solution that's embedded into into their mobile APP. So it's a way that they've been able to optimize that even further. Looking ahead into the future, one of the things that you noted in the future of banking guide was insights from the Royal Bank of Scotland and how to watch a digital bank within an existing bank. And this is almost this a very unique opportunity because it's almost like to where we could create the future while we respect the past and pay homage to the legacy, but then also take actions. What are those three steps that you've written about in the guide? So, yeah, this from Mark Bale, former group CEO of Royal Bank of Scotland, and he's the currency of the banking at bow and so the three steps that he says is that you need the backing of your CEO and chairman. HMM. So he says unless the CEO is driving the vision, there's no point in starting purpose acts. But if you can get there, if you can get your executive team on board and you know that you have the backing of the executive team, you're in a really good place. Second is the digital bank must be separated from the core business while still having executive level sponsorship. So this can be difficult, but this is like what you're saying. It's really about straddling the the divide between future facing and respect for the past. So you still want to have executive little sponsorship that you really can't be tied of the core, because you need to be able to develop this in a way that can be flexible for whatever technology comes forward in the future.

And then, third the exactly the digital bank must fit within the existing risk appetite framework and work in the long term. So it's really about establishing something that is going to be viable, even if the future brings us a completely different way of thinking about technology and other words like V are or Internet of things. Yeah, you have to be building in such a way that what you built today can easily port sure you know whatever is coming. I think, looking outside the industry, a really good example of this is almost like transforming your own business model before the environment forces you to to do that. Taking it once again proactive versus reactive. Netflix and Netflix is such a great story because Netflix, obviously it was a direct to consumer, you know, deliver the DVDVML. Then they disrupted or transformed that business model. They went to streaming. They almost lost it at that point. They were ahead of the time with that thinking, but that was what was almost the demise of blockbuster and that retail organization. But the Netflix took it even further, which you know, you being, you know, with your perspective one content. Netflix became a production organization to where they're now. There they almost control the entire experience delivered digitally. So a lot of future thinking and being one step ahead, taking a little bit of risk, but it's calculated risk and then reaping the rewards from that. John, I appreciate all the insights that you've shared today as we've wrapped up very, very practical stuff looking ahead into the next twelve months. I'm a financial brand CEO, I'm on their marketing team, I'm leading cells. What is one practical recommendation or action item that you could recommend for my team to move forward with confidence down this journey? I'd Sara. Now that man, there's so many things to think about. If I had to choose one and the moment I would say that you would want to be thinking about whether customer can do anything they want to do by a digital channel and preferably mobile, because, I mean we're seeing what's happening with the coronavirus. People just aren't able to do the things that they they are able to do banking the way that they used to be able to do it. Our CEO, Ryan cobbal he he talks about his experience with chick fil a using door dash and they're apt and being able to get in with their APP and see, I believe this is a chick flays APP. I should I should clarify that, and do his order that way and even pay via his phone and can just go through the drive through, get the get the...

...food and go and talking about that experience and how quickly they've they're pivoting when they can't have diners inside their store, and how financial institutions can learn something similar. Can you offer an experience that's seamless, that in some ways is even preferable to going into the to the branch? And if you can, then I think you're well positioned for what the future might bring and that's a great place to be in. Yeah, I mean it's just like we started this conversation, that we're never going to go back to the way that work was before because of all these environmental changes brought about by Covid nineteen. I we will never go back to the banking the way that we banked before covid nineteen because, just like financial brands are being forced to change, consumer behaviors changing and once those new behaviors, once those new habits are embedded, it is going to be a new normal. John, great insights, very, very practical stuff. Today. If there's someone listening, they have a question, they want to connect with you, want to continue to the dialog. What is the best way for someone to reach out and say hello to me personally? You could reach out. Let's stay by Linkedin. Perfect. I'm again. We'll get you. We'll get that linked up in the show notes. So thanks again for joining me, John. Yeah, thank you as always. Until next time, be well, do good and wash your hands. Thank you for listening to another episode of banking on Digital Growth with James Robert Laigh. Like what you hear, tell a friend about the podcast and leave us a review on apple podcast, Google podcast or spotify and subscribe while you're there. To get even more practical, improven insights, visit www dot digital growthcom to grab a preview of James Roberts best selling book, banking on digital growth, or order a copy right now for you and your team from Amazon. Inside you'll find a strategic marketing and sales blueprint framed around twelve key areas of focus that empower you to confidently generate ten times more loans and deposits. Until next time, be well and do good.

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