Every year strategic branding agency Seigel+Gale compiles a Global Brand Simplicity Index, across 25 industries, to generate separate brand and industry simplicity scores. In 2012, retail banking came in at #15 on an industry simplicity listing headed by online retail and closed by health insurance. This year, that ranking has slipped to 19th. And some of the industries that beat out retail banking? Shipping/mail and automotive!
It’s true that banking is one of the most systemically complex industries in the world. But when it starts underperforming mail in simplicity it’s time to introspect.
For the sake of banking customers who, as the study points out, are willing to pay up to 4.4% more for a simpler experience as well as be more inclined to recommend the brands.
For the sake of banking profitability, with research suggesting that up to 20% of potential profits are inaccessibly tucked away under layers of complexity.
For the sake of cost savings, which could be as much as 50% and 30% on application and total IT costs respectively, if IT complexity were reduced.
For the sake of innovation, with a majority of banks citing technological complexity as a barrier to it.
Whatever be the sources of complexity in banking, it is becoming increasingly clear that it is an impediment to business value. But as the demands for simplicity – from customers, regulators and bankers themselves – keep getting louder, simplification becomes an exigency.
In 2014, simplicity will become a leitmotif for all banking activities. Banking leaders will focus on simplicity to enhance operational efficiency, competitive advantage, customer-centricity, innovation capability and compliance. Complexity, it is said, is a natural byproduct of sophistication. But sophistication that precludes value is merely style without adequate substance.
Also read our blog on the Legacy as a banking trends