Will Strategy-Based Banking Predominate?

By Tony Monye

Some things are permanent in their construct. The sun always rises in the East and, every time sets in the West. Contrasted with the sun, the market environment suffers sheer impermanence. It is amorphous. In this arena, the only phenomenon that endures is change; nothing else stays the same including the wants and aspirations of the critical stakeholders. Change is constantly active. It doesn’t stare at the nape of the marketplace. It gazes deep into its eyeballs. Besides seeking its smile, amongst others, by trending along, great organisations must play servants to the epoch. Otherwise, they gain the weak end of the market-space rod.

Change, like evolution, treks more like time rather than the clock. It’s noiseless. Time speaks more of an era and, clock more about a moment. Those who see its quiet meanders ahead, survive. Unlike evolution, it’s fast. Those who track along with its speed, also survive. The marketplace isn’t an empty landscape. It is a powerful and fate-determining zone occupied by motley stakeholders of extreme shades whose eyes are fixed on the transmission and exchange of value and, on survival. Amongst others, the changing aspirations of these variegated stakeholders are the prime forces behind marketplace transformation. Of its many attributes, the instructive capacity of change tops it for me. It points organisations in the right promenade in their stretching quest for continuity. In any advancing free market environment, the forces that can obscure the effective roles of the market in deciding business fortunes are increasingly declining.

The Nigerian financial services industry evolves like those of the other climes. And, it has. Over the previous six decades (1960 – 2020), the industry has witnessed two evolutionary phases in the instrumentality of its market access. Market-access philosophies are epochal in strength. What deeply penetrated the market in an era may be quite inadequate or completely wrong in another age. Just like water flows in line with the contours of its terrain, market-access philosophies must trend along with the epochal conditions of the market. Simplistic market-access models only appeal to simplistic market conditions.

Between 1960 and 1990, the industry experienced the armchair market-access philosophers. With their slack approaches, the business of banking was snail-paced. Business eagerness was clearly too low for zero. Customers endured the time-wastefulness, rigours, traumas and cries of tally numbers and other numerous anti-service culture practices. The armchair bankers went tone-deaf when the market honked so loudly for change. With time, their sloppy attitude greatly backfired. And, they paid dearly, in the extreme, death for most of the financial institutions.

A different college of professionals appeared on the block, beginning in 1990 – the marketing-driven bankers. They observed market had transitioned along a critical path. At the ready, they quickly rode along, into town in full force, upsetting and resetting the landscape. The old books of banking were deeply inadequate. They devised new rules and operated under them. They embraced the market should decide how it needed to be served. They respected the customers’ perspectives, adopted them as part of survival and growth strategies. It worked. They went any- and everywhere with the customers, including ‘being around them over weekends’. They waited on the customers rather than have the customers waiting for them. They led their lives closely by the customers’ prayers. When the customers aspired to satisfaction, they delivered. When the customers upped the ante – cherished being delighted, the marketing-modeled bankers again delivered. The outcome – the business of banking gained massive traction. Numbers across indices were unbelievable.

For thirty years, the marketing-driven banking philosophy predominated. Unfortunately, the winning sensation has its weakness too. In spite of its sugariness, winning can also be blinding. While celebrating, a higher percentage of winners have less time for in depth analysis of the critical manoeuvres that led to victory. It is one of the forces often cited behind the emergence of new champions. Pause. Take a look at the English Premiership. It is not squawking too much to say it is much easier to win (and to regain) the Premiership than to retain it.

Against the arguments of marketing-driven banking, the marketplace again has, without alarm, morphed. A different sort of atmosphere exists. Marketing-driven bankers are in a struggle to retain the marketplace. Yesterday’s customers (other stakeholders too) are not nearby. They are largely no more. Their whims and caprices are diametrically different from today’s clients. Relationally, the environment of the 1990s and the 2020s cannot be differentiated further. For starters, in the 1990s, the competitive landscape was less eclectic. Product range, customer types were not so dissimilar and the understanding and application of the marketing concept was slim. Cold calls were the norms. There was complete absence of the digital space. Landlines predominated, not mobile phones. Competition was more or less basic, not strategic.

Under a changing marketplace, the many handicaps of marketing-based strategy are being exposed. The philosophy is increasingly yielding less in a marketplace more advanced than its planks and promises. A well-known and heavily dissected strategy has lost the bite in its wind. After three decades (a whole generation), the need to change the model is no longer opaque. Besides, a generation has its re-definitional inclinations. Like the armchair bankers, the marketing-based template operators are slipping/ sleep-walking into the same pit. Many are failing to see the moving hand writing on the wall. It is not apostatic to drop it. It is time.

Today’s marketplace is whistling for the transition of strategy from generic to specific, from individual to corporate. Built on customer engagement, the strategy-driven banking (foresight banking) promises that and more. Its era is here. It is about the eyelids, rubbing the eyes except those of stone-blind organisations. Marketing-based and strategy-driven market-access ideologies are wholly opposed. Given its data-mining capacity, the new model most appropriately tracks with customers’ emerging dynamics. While taking into account critical stakeholders insights and their probable behaviours, strategy-based banking template promises superior outcomes. It’s longer ranged and it aspires to sustainability in relationships. It is more systemic, built on systemic strong-points and organisations’ overriding realities rather than the individual inclinations of its counterpart.

Deep into the foreseeable future, the discourse will remain in the domain of the strategy-driven banking ideology. The count for the marketing-based banking philosophy is closer to ten than five. It’s over. Welcome strategy-based philosophy!

• Tony Monye is managing partner, Rham Durham Consulting Ltd