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Competition everywhere

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We humans are inherently competitive beings - it’s hardwired into our DNA. Indeed, competition is one of the most basic functions of nature. Darwin called it survival of the fittest via natural selection. All living organisms fight for survival in a constant battle of wit and adaptation.

Our ancestors competed for the limited resources available to satisfy their basic need for food, clothing and shelter. Modern day Homo sapiens vie for higher order needs like jobs and status. In the game of life, we want to be winners in all pursuits including sport, academia, politics and business.

When it comes to business, competition is the basis of the free market economy. Those firms that cannot capture and maintain a profitable market share fall by the wayside. As tough as it sounds, capitalism is the law of the jungle and it separates winners from losers.

I support the cut and thrust of open market competition. More often than not, it produces the best outcomes for consumers. As in the natural world, grow or die is a constant imperative in the business world. Players on the field must remain flexible and have the ability to respond to changing market conditions.

To be sure, I don’t believe in unrestrained competition where one wins at any cost. Governments have a role to play in defining the rules of competition so that it’s not survival of the most ruthless or the most deceptive. Beyond that, it’s up to each market participant to avoid extinction.

All markets have rules, which is why the term “free market” is an oxymoron. In Australia, the Federal Government is the rule-maker, the referee and the umpire - it regulates markets, ensures a fair playing field and enforces the law. Its job is to improve the functioning of the marketplace.

Competition is central to the operation of markets as it fosters innovation, productivity and growth. Importantly, it stops businesses from being complacent and forces them to think constantly of better ways to satisfy customers. In competitive markets, understanding the needs of customers is crucial.

But many organisations make the mistake of developing products and services without reference to customers. This results in organisations suppling products for which there is no demand. Google Glass is an example of this - it was a solution in search of a problem.

Surprisingly, many organisations make the mistake of putting the (product) cart before the (customer) horse. Yet it is only after customer needs are known that an organisation can truly be in a position to develop product solutions. All product development, therefore, must start by answering one basic question: What human need/problem are we trying to solve?

In business, beating the competition requires that you stand out from the crowd. The best way to stand out is to solve meaningful customer problems. By tapping into the direct challenges facing its customers, a business gains competitive advantage over others.

Differentiate or perish has long been a mantra of business. When it comes to banking, there are only two things that a customer experiences - people and technology - and these must work hand-in-hand to provide a point of differentiation.

For many financial institutions, that differentiation is customer centricity. Customer centricity, in turn, is about balancing high tech and high touch. Most customers prefer to use technology (high tech) for routine transactions like paying bills, but want to speak with a mortgage broker (high touch) when taking out a home loan.

However, some banking “experts” assert that we have entered the era of the digital-only customer. Customers in this segment allegedly want no face-to-face relationship with their bank. Digital-only customers may be on the rise, but I’m far from convinced that they are happy to “purchase” higher value services, like financial advice, without some human interaction.

In a 2015 article title, The Return of Corporate Strategy in Banking, Bain & Co had this advice: “Differentiation comes not from baseline steps such as moving activities online but rather by sculpting features that will induce customers to take out a mortgage or invest their wealth with one bank over its competitors.”

Personal service is still an important element of consumer banking. A 2016 report by global consulting group, Accenture, noted that “human interaction remains a vital component of customer satisfaction, even in the digital age”. Not all banking services, therefore, are ripe for complete automation. For many, particularly older generations, there is an intrinsic human desire to meet those entrusted with managing their money.

Nowadays, it is a given that financial institutions must provide customers with a multitude of platforms, including mobile, to manage their accounts and transactions. But I challenge those who claim that automation will totally rule banking in future and that it will be a case of “humans need not apply”. The robots may be coming, but the new financial order will still require a human touch.

Let the competition begin!


Paul J. Thomas, CEO


avatar Allan Ryan
The challenge of balancing people and technology will separate the winners from the losers. As technology dominates the more humans will decide how the build the technology and which technology ultimately wins. This is a battle between soft and hard skills. The challenge for employers is to recruit the right people and skills for the battle.

Formal qualifications and technical skills are only part of the requirements for modern employees. ‘Soft skills’ and personal attributes are just as important to success. Indeed ten of the sixteen ‘crucial proficiencies in the 21st century’ identified by the World Economic Forum are non-technical.

Soft skills are Self-management Communication Teamwork Problem solving Digital literacy Critical thinking Innovation Emotional judgement Global citizenship Professional ethics Enterprise skills

Technical skills are obviously important. But they only form a part of the picture.

In a world of robots, artificial intelligence and automation, the importance of soft skills is increasing for both the employer and employee. Employees have the challenge to prove their experience and proficiency while employers have the challenge to have confidence to select the right employee for the role.

The number of jobs in soft skill intensive occupations is expected to grow at 2.5 times the rate of jobs in less soft skill intensive occupations. And by 2030, we predict that soft skill intensive occupations will make up almost two thirds of the workforce by 2030. Ref Deloitte Access Economics.

It is the soft skills that drive both employee experience and customer experience and ultimately the winner.

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CEO Paul Thomas