Zsuzsanna Vargha and the interactive future of bank branches
March 2, 2009
In thinking about financial innovation, retail banking is not the first thing that comes to mind. Derivatives, global deals, complex portfolios — yes. But ATMs? Bank branches? As an ex-banker from Citigroup used to say to me years ago, “branches are a dead weight.”
Branches, however, are what makes the work of Zsuzsanna Vargha so interesting. Zsuzsi is finishing her Ph.D. in sociology at Columbia, and her dissertation examines a massive shift that has occurred across the Atlantic. She writes
Banks, after pursuing electronic banking, are once again
investing in the face-to-face encounter. This re-personalization of
finance is particularly well observable in post-socialist Hungary.
Banks individualize services to keep their share of profitable
clients, and reach out to new populations in person.
What do these changes mean for the future of retail finance? To address that, Zuzsi conducted ethnographic research on the Customer Relationship Management (CRM) software used to recommend products to bank clients. She then examined a savings and loan-type bank that used a direct selling organization, not unlike the “thundering herd” of salespeople that Merrill Lynch used to have. Her first findings are available in the first paper to come out her dissertation, “Markets from interactions: the technology of mass personalization in consumer banking.”
Zsuzsi’s study comes at a particularly timely juncture. Now that proprietary trading no longer seems to an option for American banks, these institutions need to reimagine their identity as something exciting and innovative … but distinct from Wall Street. Zsuzsi’s conception of retail banking as a high-tech service could well be the way to go.
We’re lucky to have Zsuzsi as guest blogger at Socializing Finance for the coming week.