In pondering some of the challenges that Canadian banks are facing with respect to their margins and product offering, I read an article today in the Financial Post (Canadian plants putting Detroit’s oil sands waste pile to use) that seemed to serve as a great reminder of how a problem for one person can result in an opportunity for another. The story details how a Canadian electrical power plant is burning a stockpile of petroleum waste to power their facility as it is cheaper to use compared to natural gas. The waste pile is in Detroit and is not only an eye sore but has created angst for local residents that have the privilege of looking at it everyday.
I am convinced that Canadian banks have an enormous opportunity in front of them to really improve the experience for consumers and businesses who rely on them for money to do the things they need to do. In my opinion, the banks all move as a herd with no bona fide interest in serving the customers they have. They operate very much like large organizations that are hard to move and because of the need for margins, have raced to the bottom of using technology and staff to serve the marketplace. Every business needs to be efficient. Every business should work hard to maximize profit. But neither efficiency or profit in and of itself establishes and increases value. Without customers there is no business process that needs to be made more efficient. Without customers there is no profit to be earned. In Canada, the marketplace for providing financial services to consumers and businesses is competitive from a pricing perspective but not from an experience perspective. I believe we would be hard pressed to find loyal customers of banks who believe that their bank provides them with a better experience compared to other banks. If anything, a customer of a bank would say “they have been my bank forever and as far as I am concerned – they (banks) are all the same.” This should not be a sufficient response for any bank let alone any business.
If an electrical company can find a way to remove a problem, earn a profit and heighten its profile in the market certainly a bank in Canada can find ways to raise its profile, earn a profit and improve upon a problem.