How to guide your customers towards "good" and create shared value?

The HBR article Creating Shared Value includes ways to shift from a purely capitalist, profit based system to a both profit and social gain based system. When I hear companies purely based on profit, the first sector comes to my mind is the banking sector. Since I worked in the digital channels department of a bank for 2 years, I want to talk about how banks can create shared value through its digital platforms and bring new perspectives in favor of consumers’ financial healthiness.

Market trends show that there is a shift from traditional banking system into disruptive, non-bank applications and banking services that combine financial needs of consumers with non-bank moments in consumers’ life. For instance, payment services has started to infuse into messaging applications so that customers can more easily complete their money transfer transaction during talking to their friends about the dinner they had last night and one should pay to the other person. I believe the important idea behind this combination of financial services with daily interactions depend on understanding consumer necessities better and trying to answer them. As the article mentions: “For a company, the starting point for creating this kind of shared value is to identify all the societal needs, benefit, and harms...”, companies should first shift their focus to customer needs and re-evaluate their customers’ overall experience with their products. Going back to the banking example I gave, I believe banks have realized that financial system has been an enemy for customers for long time and now it is time for banks to position themselves as lifelong financial friends of customers. By repositioning themselves, banks could continue earning profit through not trying to push customers to spend more money, instead they can offer them products to help them keep their budget safe and manage their financials wiser. Hence, for me, this realization or enlightenment of banks started a new era of reconceiving products and market in banking industry, which is the first way of creating shared value according to the HBR article.

More specifically, I’d like to give some examples of banking products that I believe create societal gains in the long term. It has lately become popular for banks to implement smart decision making tools to their digital products, online and mobile platforms. These smart decision making tools track customers’ financial habits, such as spending patterns and budget management, and reflect, warn, offer related products or financial actions accordingly, in order to improve customer’s financial status. The goal behind these tools is not to lead customers to spend more but to push them towards maintaining their budget and accomplish their personal financial goals. Generally, customers are asked questions in the beginning, such as “How much would you like to spend on grocery shopping monthly?”, and the smart algorithm on the backend tracks customer’s money inflows and outflows, and guides them towards their personalized financial goal.

Adopting this approach helps banks to improve their competitive position (Because customers tend to like personalization in their budget management) and advance social conditions of individuals, resulting in the benefit of the overall community in the long term. Therefore, I believe banks can utilize digital platforms to focus on creating shared value and build innovative and disruptive services to connect competitive power and social advantages.