Banking is Changing (part 2 of a 2-part series)

In part one of this series I said that I’m a firm believer that challenges are opportunities dressed in work clothes, and that by deduction we can quickly see that there is a surplus of opportunity in our current economic environment.

Here’s where I see some of the greatest opportunities for individuals, families, and businesses:

* Improved lending standards. Though they will remain tighter than what we’ve seen in the last few years, lending standards will be different in good ways. It seems that everyone is internalizing the benefits of the sound, fair, and more responsible versions of standards from the last 15 years. These fresh standards will be better because the economy is forcing all of us to be more responsible and accountable. Sound standards are good for the economy and everyone participating.
* Customer service matters, but doesn’t replace technology. This one is a paradox. I argued in part one that technology matters but doesn’t replace customer service. In fact, both are true. In 2010 we’ll see an increase in the adoption of technologies designed specifically to assist the customer–technologies that do what people can’t. So while it’s critically important for banks to give you the attention you deserve, when your bank chooses to become IT savvy and makes sound business IT investment decisions, they’re going a long way to invest in your financial success and future needs.
* New regulations will require more accountability from everyone. The Federal Reserve has stated: “Our goal is to ensure that consumers receive the information they need“. Combined with other things I have read in trade publications, regulators are working to require the banking industry and the consumers who use the products to be more responsible for their actions. Or in the words of economist Merton Finkler, “In a highly leveraged economy, fiscal and monetary policies are not enough. We have to make changes in lending behavior. Excessive debt accumulation, whether it be by the government, banks, corporations or consumers, poses greater systemic risks.” In our ever-shrinking world, the actions of individuals matter more than ever.
* Banking really is no longer a service, but a commodity (like just about everything else). From Wikipedia: “A commodity is some good for which there is demand, but which is supplied without qualitative differentiation across a market. It is fungible, i.e. the same no matter who produces it…Commoditization occurs as a goods or services market loses differentiation across its supply base…As such, goods that formerly carried premium margins for market participants have become commodities…” It hurts me to say this, but that’s a pretty good definition of banking, no matter where you choose to put your money. The winners in 2010 and beyond (and the banks you should be looking to do business with) will no longer be determined by their products or services, but rather by how well they deliver on their promises and by their willingness to give back to the people and communities they serve. This is especially true for the smaller “Main Street” banks that are more in touch with the local economies and communites they serve.

What are your thoughts? What changes do you want to see? What would you adjust?