Samantha – One of Us, and All of Us
On a rainy spring afternoon, Samantha was absentmindedly reading the news as a procrastination tool between her two zoom calls, and finding the headlines even bleaker than usual. Unemployment numbers around the world had just hit historic highs, the mortality rate of COVID was unclear, her LinkedIn was flooded with people who had just been laid off, and economists were sounding the alarm bell. Some heralded COVID as the moment to rethink everything, others evangelized the myriad benefits of remote work. Per usual, in the background, the climate continued its collapse. Samantha had no dinner parties, no weekend getaways, no weddings. Feeling destabilized and confused, she found herself questioning everything – her job, her relationships, her furniture, and even her purpose in life.
Samantha’s story was and still is familiar to many, and accessing embodied experiences like hers lay at the core of our decision at ReD Associates to conduct a series of ethnographic deep dives into the COVID-impacted realities of individuals and communities around the world. Ethnographic methods have always been powerful, yet in a pandemic world, they have in many ways become more powerful than ever. Not only do they enable individuals who haven’t been asked to reflect on and share their lives with others to engage with outsiders, they enable the forms of insight that are most missing from today’s punctured lives – deeply personal and structurally emotive. Additionally, a theoretically grounded ethnographic discourse enables us to break up a concept to its necessary parts – to delineate the sub-concepts that constitute a concept in our collective minds.
This is exactly the type of insight and foresight that big data and large-scale quantitative methods haven’t been able to deliver. Asking Samantha how unsure she feels about her future in a survey can lead to a data point, but understanding her lived experience amidst a pandemic can lead to a perspective. In this article, we have taken advantage of the enabling power of ethnographic methods. We take the lived experiences of a range of interlocutors (100+ respondents from China, France, the USA and Denmark) – some who were struggling financially and some for whom the pandemic was simply a mild inconvenience – and turn these into a new and much needed north star for how banks can not only solve people’s deepest financial needs but also regain commercial and societal momentum.
We heard stories like Samantha’s repeatedly, from every corner of the world – COVID and its associated consequences like remote work, the inability to travel, increased loneliness and very limited number of social in-person events has breached our notions of how a worthy life can actually be lived. Our contention is that social scientists and businesses could benefit from analyzing COVID as a global breaching experiment where so many of us enter an existential questioning of what life is really about. We observe how such questioning, combined with heightened risks, exacerbate an individual’s financial anxieties and uncertainties. Today, 51% of Americans feel anxious about their financial situation1. Unlike prior crises, the events don’t seem clearly bounded in time and space – they can’t be neatly defined and positioned, simply through an “economic correction” – they are deeply structural and existential, therefore also likely to stay with us longer.
Spurring financial anxieties was a heightened sense of dislocation between what was happening in stock markets and life as lived in the everyday. As people witnessed the economic devastation of COVID first-hand – with massive job losses and enormous pressure on small businesses – the financialized stock market skyrocketed. The disconnect between the “real” economy that people saw at their immediate environments and the “financialized” stock economy become deeper than ever2. Some felt newly vulnerable and alienated economically, others felt a sense of continuity and growth in their precarity.
Our research indicates that this increasing disconnect has instilled a distinct sense of alienation in Samantha and many others’ minds. Interlocutors expressed the sense that the financial system was operating under an arcane and an opaque rulebook – one not accessible to the wider public. They worried that they had lost control and agency over their financial situations, they were left out of the financialized stock economy. They felt left in the dark both today and in the future – and that no place or individual was there to help them make sense of it all.
Where Have Banks Been?
Where have banks been during this moment of crisis? In short, they have largely been absent from helping people make sense of the current financial moment. Bjørn, a Danish interlocutor, said: “My bank didn’t contact me during COVID, but I didn’t expect that anyways” - simultaneously revealing banks’ lack of support during a moment of truth and the longer term disillusionment in banking. In response to breaches of the public trust in the 2008 financial crisis, which was both preceded and superseded by instances of large scale fraud in the financial sector, governments have used a mixture of methods to further regulate yet continue to allow certain vehicles that allow greater risks and returns in the marketplace. As a result, complexity and operational costs have been rising for more than a decade; in return banks began to focus inwards, fighting an increasingly dire battle for their futures. Compounded by thinning margins and a sub-optimal macroeconomic outlook, banks have struggled to maintain a sustainable business.
Over the past few decades, banks took to increase profitability by introducing digital self-service to cut personnel-related costs, offshoring and increasing prices for previously free or low-cost services. Though temporarily helpful, some of these tactics have also served to weaken the existing relationships with customers. Now that these steps have been taken, it is unclear where banks should turn.
A Fresh Take on a Traditional Role
In a time where everyone is busy calling out the next trend for banks to pursue, there is one thing that banks can and should hold on to: listening to what consumers are actually in need of right now. Interlocutors expressed it very clearly: right now, what they need is a sense of stability. Our data uncovered a widespread desire for anchoring – and the notion that banks, as lifelong financial partners, are structurally well-positioned to take on this role.
This is important for two reasons: One, this is not what banks focus on today. In our prior engagements, most banking executives tend to focus on the means (digital, app, tool, etc.) or the new idea (gamification, nudging, etc.) rather than the core customer need for stability.
Two, it is easy for banks to mistakenly assume that they are already delivering stability. Banks have traditionally positioned themselves as a stable haven for consumer finances, with a focus on permanent physical locations and a reputation for fiscal conservatism. Yet, our past engagements with C-level strategy throughout the banking ecosystem has shown that in many areas of the financial system the way consumers experience their finances has changed dramatically in recent decades. No longer tied to physical location, money has become ever more abstract, digital and fast-moving – and imbued our digitized financial existence with a sense of insubstantiality.
Stability is still the biggest unmet need for people that feel consistently ignored in their customer experiences. In our discussions with people, the desire to safeguard and nurture ones’ finances is a constant theme – even in the context of a proliferation of tools for easier access to riskier investments. Yet, banks are no longer fulfilling this desire. Even prior to COVID’s world-shaking effect, many consumers felt abandoned and unsure of where to turn for advice, a feeling of course compounded by today’s uncertainty.
Stability is a potent human theme. It offers guidance for revamping the banking experience across touchpoints and corporate functions – but it has to be carefully dissected. Understanding how to reposition the bank as a source of stability in peoples’ lives requires the careful unpacking of what ‘stability’ even means to people today. Our ethnographic immersions enabled us to do precisely that. We studied the notion of “stability” multilaterally and dissected it into its necessary components that collectively constitute the notion itself in people’s minds. When unpacked, stability is indexed3 by signs of consistency, permanence, predictability, preparedness, and safety. To understand stability, or for a bank to provide stability, a deep understanding of what all these five aspects mean in people’s lives and now they are manifested is necessary.
What Does Stability Consist of?
Predictability is knowing what is going to happen, and – to a certain extent – why. Social psychology has long pointed to the generalized concept of ‘predictability’ as attractive.4 When faced with the prospect of adverse or challenging events, people generally prefer that these follow a predictable pattern, providing time for psychological and practical preparation.
Banks can’t predict the future, but they can proactively provide guidance and realistic scenarios that will help people assess their financial setup and plan accordingly. For example seeing how the stock market typically rebounds from a crisis would have brought peace of mind and confidence to millions of customers who didn’t get a personal phone call from their bank advisor during COVID.
How can banks give customers more predictability in a rapidly-shifting world? A bank which prioritizes stability must endeavor to ‘decode’ the world for customers – providing them with the oversight and insight to develop a sense of being able to predict the future.
Preparedness is the notion that one is equipped with the tools and knowledge required to take the right action in adverse situations. This requires a timely awareness of issues as they arise, an understanding of which actions are possible, and some knowledge of what outcomes are most likely.
We recently spoke with Rafael, a recent arrival in the UK from Poland, who expressed his desire for preparedness as a desire to “know what to do when”. As he put it, “my [financial] situation is still unstable here… I don’t always know what to expect, or what I should do, which means how can I react?” Banks have a big opportunity to help people prepare for their financial futures: to save up right for their retirement and to be adequately covered in their insurances would be two concrete examples.
How can banks prepare their customers in a world where face-to-face interaction will only get more limited? In order to do this, banks will need to rethink digital – automating the process of helping their customers learn while retailing a human touch where this is especially critical.
Safety, in this context, is the feeling that no matter how bad things get, there are mechanisms in place to minimize permanent damage. This feeling stems from both a logical understanding of how one will be protected, but is also emotionally anchored in caring interpersonal relationships (e.g. with advisors).
Throughout our research, respondents who have successful advisory relationships with their banks express the feeling they get from these relationships in a similar manner. “I just feel safe with him” said recent-retiree Helga, who began investing at the encouragement of her financial advisor, “no matter what I decide to put money into, I can’t mess things up too badly.” Yet banks can do much more to deliver safety through scalable digital models – only a few have developed so-called “health checks” where algorithms scan customers’ portfolios and flag when there are unwanted financial risks.
Where do banks need to focus to foster a sense of safety amongst their customers? To truly commit to building a relationship of stability, banks will need to identify key moments in their customers’ experiences – and learn to reach out a steadying hand when it counts.
Consistency is the quality of always behaving in a similar way. It is the feeling that regardless of time, people involved, and the circumstances, the experience an individual has will be a similar.
At a bank, consistency is the feeling that all policies are widely agreed upon, and that each advisor, page, and toolkit are in complete alignment in their perspectives for the future and advice at the moment. It is the one singular voice that generates a sense of stability.
This is a need that banks are far from delivering today. The ideal would be two different advisors giving the same type of advice under similar circumstances. The reality is that most customers get a different recommendation depending on whom they talk to. Even worse, sometimes we met people who experienced a disconnect between what their advisor told them and what the digital communication claimed to be true. “Sometimes the tool on the website recommends one thing, and my advisor recommends another thing – what am I supposed to do then?” asks Allison who has been working at the same retail bank for checking and savings since she started her professional career.
How can a bank deliver consistency? How can it ensure that all advisors, tools – both offline and online, policies, and branches provide the same advice, experience, and message?
Permanence is the notion that something lasts longer than one’s lifetime. It is the quality of always being there – the temporal, the eternal dimension of stability.
This is the notion that a bank will last longer than a customer’s lifetime – it has a past, a present, and a future. The bank as an institution has been through so many ups and downs that no fluctuation or crisis has been able to shake it up.
Consumers often talk about permanence in terms of their money through the use of a metaphor like vault money but also in terms of how the bank has “persevered through things.” In Atlanta, we met a 59-year old university administrator Luna who said that the reason she chose the particular retirement providers she has had were that “they were established institutions that have been there forever, nothing can tip them off.”
How can longevity be leveraged by a bank? What is a way in which banks can leverage their resilience and perseverance to communicate that they have stood the test of time?
Stability as the Next Big Bet
Stepping out of the shadows to become a stabilizing force in consumers lives will do a lot to not only drive business in the short-run, but also restore banks as pillars of their communities – building loyalty with customers, driving second-order revenue sources, and reducing the risk that banks end up simply as utilities. Months-long ethnographic immersions showed us that stability is the primary need for many, and banks are in a uniquely advantaged position to deliver it, as no other institution is closer to our financial lives than banks themselves.
To all banking executives that have been thrilled to discover how they have been able to drive change during COVID faster than they previously thought to be possible – this is our message:
Use this period of upheaval to catalyze a much-needed change. Make stability your big bet in a time of uncertainty. Take advantage of your unique position and perform radical change – not an in incremental one. Demonstrate how established banks can take the reins of developing the financial sector and provide an exciting alternative to upstart fin-techs who have been innovating new ways of interacting with their customers.
The future of banking is naturally still obscured, but one thing that is clear is that shifting focus to stability will provide banks with a much-needed lifeline – an opportunity to take greater control of that future.
1. Little, Kendall. “Survey: Most Americans Are Feeling Anxious about Their Money.” Next Advisor (in partnership with TIME), June 18, 2020. Accessed Sept. 27, 2020.
2. Davis, Gerald F. & Kim, Suntae. “Financialization of the Economy.” Annual Review of Sociology, vol. 41 no. 1, 2015, pp. 203–221
4. Miller, Suzanne M. “Predictability and Human Stress: Toward a Clarification of Evidence and Theory.” Advances in Experimental Social Psychology, Volume 14, 1981, pp. 203–256.
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Martin Gronemann heads up ReD’s practice in financial services in Europe. He has led executive engagements across retail banking, wealth management, corporate banking, pension products, and life insurance. Martin writes and speaks on how financial institutions can break free from the industry echo chamber and better understand and connect to people’s relationship to money. His work has been featured in publications such as FT, The Economist, The Times, and Quartz.
Cengiz Cemaloglu is a senior consultant at ReD working across industries with a particular focus on devising C-level strategies for clients in finance, B2B, and technology space. Prior to joining ReD, Cengiz worked at Goldman Sachs’ multi-asset investment group, and holds a BA cum laude from Harvard College in Social Anthropology and Government. His work has been featured in publications such as FT, The Diplomat, EPIC, and The Journal of Contemporary Asian Studies.
Lara Casciola is a senior consultant at ReD, specializing in solution development across service industries. With an educational and professional background in design, she is focused on how industry can better understand and cater for our complex and emotionally driven reality. Prior to joining ReD, Lara worked both in-house and in a consulting capacity for organizations such as Nets and Dow Jones.
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