INTERVIEW WITH JOHN BERRY – QORUS
For the third episode of our Innovation talks series, Supernovae Labs met John Berry, CEO of Qorus (formerly known as Efma) and renowned international retail banking expert and transformation leader.
Our CEO, Carlo Giugovaz, interviewed him on the ongoing transformation of the banking sector and the key challenges the market is facing right now in order to stay competitive in a world in constant evolution, with a special focus on the Italian context.
C: Thank you John for taking the time to talk with us and for addressing such a relevant issue for the banking background. In a world of continuous changes, organizations have to keep up to survive in the market. What are the trends in the banking and insurance industry in Europe, Asia and America?
J: Some trends are significant in respect of their impact on the performance and future of the financial/ banking sector going forward.
I recall a Gartner report, which is now probably four years old, which predicted that by 2030 some 80% of financial institutions would not exist. Whether that prediction becomes a reality we will have to wait and see, but there is no doubt that financial organizations are under significant threats from within the industry as well as perhaps more importantly from other sectors.
C: Organizations have to understand the challenges they are facing. What should bankers do in order to survive and drive the business forward in 2030? What are the successful factors for the future of the banking industry?
J: The challenges are huge – and I’m not convinced that many financial organizations are appropriately structured to cope with these challenges: many are very silo structured, which, in my view, is an inappropriate way to manage the challenges presented by customers and competitors today.
One of the key challenges is around driving cultural change. If you read the accounts of many leading players, they talk about the amount of investment they are undertaking to improve the experience for their customers. If you then ask customers have they seen positive changes to their user experience, too frequently the answer is no. Experience is still fundamental to delivering differentiated user experience that retains customers and drives new people to the bank.
Historically, people remained because the banks’ level of services had little to choose between them, but now choices are much wider: fintech, non-financial players, etc. These organizations are impacting that customer loyalty, the best revenue opportunities, and leaving the bank with the poorest customer alongside the expensive infrastructure. These new players are offering a cross-selling experience and not only financial products. I believe that the organizations that will be the most successful in the future will be a mix between small/niche players and the ones that use the platform structure to start selling a range of non-financial products – being there throughout the customers’ lives to support, educate and help them achieve their dreams.
The customer’s financial provider has to be there throughout the customer lifespan, it should be looking after his financial well-being and giving opportunities to achieve his aspirations. Educationally people are not taught about the world of money – there is room for banks to play a more active role in educating people.
The banking sector has got to be changing culturally from a very rational world to one that understands the emotional triggers that motivate the customer when making decisions. Banks that make this change enjoy significant advantages. How do we do this? Do we, for example, set up our own challenger bank to engage people in that space, or build change from the existing business model? There’s a clear element of trust that fits with many non-bank organizations – people are comfortable going to these organizations because they are focused on the individual. If you go to a bank’s website, they say how much profit they have made and how good they are, rather than what they are doing for the individual customer. Non-banks can be formidable competitors – it this those players that are shaping customers’ expectations (Netflix/Apple/Uber/Alibaba to name a few). Change can be daunting but banks need to be brave to tackle the tsunami of change that is coming their way
C: Based on your experience, will the Italian market be capable of adapting to change and innovation?
J: I have worked in the Italian environment running the Italian subsidiary of a major UK bank. We were the first organization in Italy to introduce fixed rate loans, and I recall that the parliament was critical of the existing Italian banks: “How come this small bank with a very low market share comes with something so innovative?” You know, small players can have a really big impact! The Italian market perspective and culture can be very entrepreneurial and adaptive, in my view there’s a willingness to change and be flexible. If you look at Italians, they appear to travel the world more than other Europeans, giving them a wider view perhaps. If you compare Italian culture and French culture, they are two different worlds: French are driven by rules and regulations, while Italians are ready to adapt the rules. You can see it in the car industry. Italian cars have an element of ‘emotion’ in the product (even if they sometimes frustrate you if they don’t work!!) while the German one is perhaps more about engineering but never goes wrong!! So, it is a cultural issue. If you want to build something beautiful that looks the part, then if you build the right structure behind, it can give an advantage over other organizations.
C: Given there are so many ongoing changes in the financial market, how is Qorus going to keep up with this shifting of priorities?
J: Financial services are really at a crossroads. Transformation takes time to deliver, but to me what is required now is something bigger: ‘reinventing financial services’ is what is needed.
Just like our members Efma* has to change – it has been somewhat like an old lady: stuck with our antiquated processes, not digital enough, and we don’t use social media enough.
It is not just about changing a name – Efma has become Qorus – because this is not about painting the outside of a house but about rebuilding the house. This is our goal: to move from a ‘nice-to-have’ service to one that members ‘need’ to experience and benefit from. Challenging, yes – achievable? Absolutely!