• Åke Freij
  • Published: 23 July 2018
We live in a time where new technology gives individuals more choice, quality and convenience than ever before. In financial services, we are specifically witnessing this through customer service automation, data analytics and emerging tools such as artificial intelligence, machine learning and blockchain.

All the while, emerging regulations are gradually moving the power of decision-making from large banks to their customers, through the upcoming second directive for payment services (PSD2). So, this is great for customers, right? But wait a minute! We are also seeing a growing number of cases where data and technology is being mis-used. Customer data is lost, unwanted services are given, and personal information is sold to other companies without individuals even knowing it. New initiatives such as GDPR (the General Data Protection Regulation) have been launched to counter this.

"Can we find a balance between maximising customer power and choice, while improving efficiency and transparency in service delivery?"

It’s become apparent that the picture of a power shift cannot be painted in pure black and white. Organizations should therefore be asking themselves one fundamental question:

Can we achieve a balance between maximizing customer power and choice, while improving efficiency and transparency in service delivery?

Our discussion pointed to three potential recommendations to this:

  • You – as in the individual - need to spend time on your finances. Note how much time you spend each week on shopping clothes and shoes, sports equipment and interior decoration. As Johanna said, “You should spend at least as much time on selecting an investment fund as you do when buying a pair of running shoes.”
  • You additionally need to think about what you want and then articulate your needs. You should think about needs NOT in the shape of bank products, but the ones related to your fundamental life situation now and in the future.
  • Remember that technical improvements do not come to all. As an example, private trading of shares has become much faster, with much richer functionality and at a much cheaper price in the last 15 years. However, only 20 percent of customers in Sweden own direct shares (according to Johanna), so this benefit falls to only a few.

We then reflected on the following two questions:

1) What can customers do to capture more power in relation to banks?

You need to invest more time to learn about personal finance and to engage in selecting providers, offerings and products. Also, trying out new technology and how it is applied in financial services is a good use of time. Do not stick to one bank as a provider of solutions for your entire private economy.

2) How can banks change to become winners in the future?

Collaboration will be key to success. There is no chance that a single bank can provide the answer to all your demands and the needs of your customers. Be mindful of how technology is used, so that the benefit comes to the customer and not just to the bank.

Banks and other companies have no choice but to live with the development of more complex regulations and faster pace of technologies emerging. The winners are those that manage to do three things:

  • See regulations as an innovation driver, not simply as a burden.
  • Deliver innovation to ALL customers (not just the rich and advanced).
  • Give customers and collaboration partners access to data and tools to create a 360-degree view of the bank, instead of the bank holding all data.

If this is really done (and not just paid lip service to), we can achieve a future where BOTH individuals and banks share the power. There is evidently increased power being offered to customers, but customers need to engage more in their financial affairs to capture it.

If you'd like to speak to Åke about the changing banking landscape, please email him at