Matter: The future of financial services in an increasingly disloyal, disrupted world

According to Havas Media’s Meaningful Brand index, consumers wouldn’t care if 75% of brands disappeared tomorrow. So, the real question is: is your brand one of the 75%, or the 25%?

There are no longer any meaningful voices left in financial services who dispute the magnitude of the disruption being experienced across the industry. You can pick your poison: for retail banks, it’s the fact that the next generation would rather bank with Amazon than any bank; there are regulatory reforms affecting everyone from multinational FIs through to mum-and-dad advisory and brokerage operations; and macroeconomically we are still living through turbulent times from a liquidity, security and risk perspective.

Everywhere you turn, ‘disruption’ is the word and ‘dealing with change’ is the topic of the day.

And ‘disruption’, even though it’s the buzziest of the buzzwords, is the right word. I have unique perspective on this. My company built the largest financial education program in the world – more than 500,000 students in more than 3,000 Australia schools have gone through it every year for over ten years. Just last week, we were testing a financial education board game with 21 11-year-olds at our clients’ offices (a major national retail bank) – let me assure you, if you don’t think change is coming, spend a few hours talking with the next generation about financial services… they’ll put you straight!

So, we know change is coming. And we’re all talking about it. But herein lies the problem – everyone is spending so much time talking about the need to change, and why we should change, that few people are spending enough time on what needs to happen and how we change it.

This presents a unique opportunity for forward-thinking organisations in financial services to lead, rather than survive, through the current changes we’re facing.


The neatest way to think about the forces of change in financial services is to break them down into the four main drivers. We think of them as the ‘four Cs’.

The first force is ‘Commoditization’. This is the net result of the combined effects of technology, disintermediation, and on-demand services. The reality (it is harsh to say, but honest) is that all financial services companies in each vertical sell exactly the same thing. Bank accounts are the same, mortgages are the same, credit cards are the same. There are minor differences at a detail level – but everyone is selling, for all intents and purposes, the same stuff. And any product-level innovation that really does ‘lead’ is generally replicated quickly by everyone else. This creates high levels of substitutability and – presto! – commoditisation.

The second force is ‘competitiveness’. As barriers to entry are lowered, competition increases from both new entrants (have you noticed for every product you can get from a major multinational financial services company, you can now also get it either at a fraction of the cost, or for free, from a fin-tech startup?) and also industry incumbents. This is true in both large retail financial services spaces where market saturation is almost 100%, and also in less well-subscribed industries (like financial advice, where over 50% of Australians have no relationship with a financial advisor).

The third force follows from the first two, and is ‘cost’. The effect of the first two forces is huge downwards pressure on prices, which further drives downwards pressure on cost internally to remain competitive. Add to this that digital technologies increasingly mean consumers expect things for free, and you wind up with enormous pressure on costs right across the value chain.

This culminates in the fourth force, which is ‘complexity’. This is true in every sense of the word. One (cheeky) study found that the readability and complexity of an average life insurance product sits between The Wall Street Journal and Einstein’s Theory of Relativity. That, for the record, is complex! The complexity is further compounded by the first three forces – trying to differentiate, innovate and win in commoditised, competitive and cost-pressured markets is tremendously complex.

Those four forces all combine to mean one very important thing: it is no longer enough to be ‘good’, it is not even enough to be ‘great’, we have to matter.


We spent nearly five years with a team of researchers embedded inside the world’s best organisations to look at how they drove internal responses to these forces, and how they re-engineered their go-to-market strategies to compete in this new market we’re all facing. The book we wrote about it was called Matter, and we chose that title because it was the one word that best summed up the competitive response.

What we found is that organisations – especially in financial services – who want to compete are going to have to do a few things well. These are things they need to do if they really want to matter to their customers.

Firstly, they’re going to have to solve customers’ ‘higher order problems’. In a world where fin-tech start-ups are driving the tech agenda, and regulators are putting high levels of pressure on behaviour, and consumers are increasingly fickle and disloyal, it is organisations who can solve the highest order problem of their customers who ultimately win.

For too long, financial services organisations have traded on the complexity of their products – now, that needs to shift. Financial services organisations need to see themselves as partners with their customers, not just providers to them. They need to use their impressive data sets (and build some deep relationships) to understand in a more nuanced way the world of each of their customers, and start building products that offer novel and unique solutions to the challenges they face.

Secondly, they need to build elevated experiences that move them out of commoditised, price-based competition and into premium, experiential-based offers. Products can be commoditised, experiences can’t. This is equally true in B2B and B2C-based propositions.

This experience must hold in an omni-channel world, as we learned because banks tried this, and had some false starts. They took the approach of trying to make their branches feel like the Apple store. Sure, that’s kind of cute – but when you’re selling credit cards not iPhones, there’s a limitation to how much open plan, concierge-based sales experiences really translate.

What financial services organisations really need to do is smartly align their physical and digital experiences to offer clean and simple customer experiences that feel empowering and inspiring.

This isn’t just retail banks. One senior advisor in a mortgage broking firm once said to me “they come [to the first consult] with dreams of owning a home – they leave with 5-pages on LVR”. We need to make sure the experience of doing business with us as a financial services provider has an emotional component, because that’s what makes people buy.

Thirdly, we desperately need to build cultures of innovation inside financial services firms. This is where individual leaders and managers can play a role. Navigating these changes is not something that CEOs and senior executives can or will do alone. In our work with IBM on knowledge management, we found that 75% of innovation in companies comes from spontaneous collaboration between staff (not deliberate R&D).

If we want to meet and overcome the challenges we face in markets, we need to commit to collaboration at all levels of the organisation, that will drive new ideas, new offers, new approaches – and then have leaders who can build cultures that allow us to follow through.


The stakes in this conversation cannot be overstated. All types of financial services organisations find themselves at a turning point in the industry, and a turning point in their history. The hard truth is that not every one of those companies will come out the other side in good shape – or existing at all! This is a time for courageous leaders, for committed staff, and for intelligent strategy.

If organisations can put the need to matter at the center of their thinking, and can have the humility to understand that the things that made them great yesterday may not be the same things that will make them great tomorrow, then they can truly matter, and be winners in this time of disruption.


Dominic Thurbon is Chief Creative Officer at Karrikins Group, a behaviour change consultancy with over 120 staff across 11 cities in four countries. Dom works with financial services clients around the world including Commonwealth Bank, Royal Bank of Canada, Macquarie Bank, Bank of America and Auckland Savings Bank. He is also lead architect of award-winning financial education programs reaching over 700,000 students each year. His latest book, Matter, is available through Random House.

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Matter: The future of financial services in an increasingly disloyal, disrupted world
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