Of course big banks are “inside-out,” in the sense that they design their business models to extract from customers what they need to fill their legendary profit appetites. No way would they consider going “outside-in” by designing their business models around customers, in the belief that adding maximum value to customers is the best way to add maximum value back to themselves.
Upside down? Hell yes. Just as customers go upside-down when their equity to loan value ratio goes negative, banks go upside-down what their customer equity to need for business ratio goes negative, which it’s been for large banks for a very long time.
Now for the big question, “So what?” To which I say, “So plenty.”
At least in the U.S., big banks already have worn out their welcome with consumer and business publics. Still, revelations of past wrong doing continue emerging, such as Wells Fargo now hit with two major lawsuits for organized efforts to push minorities qualified for market rate mortgages into much higher interest, sub-prime instruments. Plus, revelations of new wrong doing are starting to spill out, such as Goldman and Morgan Stanley going right back to using high-leverage, ultra-complex credit instruments few bankers understand. Put it all together and a smart, financial services executive just might see a huge, “outside-in” business opportunity.
I’ve long said that the first big bank to transform itself into an “outside-in” thinking, customer-driven organization across the board (not just in pockets) will dominate the marketplace. What are the chances it will happen?
