At first glance Bank of America (NYSE: BAC ) and Apple (NASDAQ: AAPL ) don't have anything in common. But it turns out if Bank of America wants to succeed in the coming years, it needs to look to the technology titan in three distinct ways.
The banking industry is poised for major changes. A recent survey of those in the millennial generation from Scratch, a division of Viacom, showed the banking industry was at the highest risk of disruption, as the findings found, "millennials don't hate banks; far worse, traditional banks are becoming less relevant as they look elsewhere to meet their banking needs."
More than three quarters of the millennials noted they would be excited for technology firms to come into the banking industry and disrupt it. A study from consulting firm McKinsey & Company entitled Money talks: Why financial institutions need to pay attention to Apple also highlighted the banking industry is poised for change. That doesn't mean the end of things for Bank of America and its peers, but they have to act now.
1. Insist on innovation
McKinsey noted "if traditional players do not innovate, consumers will look to others who will," and highlighted 90% of the people it surveyed felt there were products and services being created they didn't know they needed, but would ultimately come to rely on.
Remember the original iPhone was first launched in June of 2007 and the first iPad was released in April of 2010. These products are now ubiquitous across the world -- Apple sold a staggering 51 million iPhones and 26 million iPads in the most recent quarter -- but the reality is they've only been around for less than seven years.
Such powerful examples of innovation reveal how one pivotal product can dramatically change not simply an entire industry, but the entire world.
In the case of Bank of America, it too has recognized the shifting dynamics of banking, and is looking to change the way it interacts with its customers. In October it announced it was rolling out new versions of branches in select markets which offer more flexible hours, greater technology resources, in an effort "to make the customer experience...reflect how people live their lives every day."
It appears Bank of America isn't resting on the fact it has the most deposits of any bank in the United States -- $1.1 trillion at last count -- and is seeking to make itself more available to the changing consumer dynamics and preferences.
2. Move quickly
In addition to innovation, Bank of America needs to move fast. Banks are often characterized by their inability to respond in a timely fashion, yet this will need to be remedied if they are to succeed.
To the credit of Bank of America, it has been willing to change quickly. One of its most noted recent failures was the $5 debit-card fee fiasco in 2011. News surrounding the additional fee was first reported at the end of September, yet almost exactly one month later the bank announced it would not implement the universally hated charge.
"Our customers' voices are most important to us," said the co-chief operating officer, David Darnell of the announcement. "As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so."
While many may question Bank of America's decision to implement the fee, its willingness to respond quickly and definitively should be applauded.
3. Look outside the box
The final thing Bank of America and the other banks must learn from Apple is the reality the biggest moments of inspiration often occur from individuals, firms, and moments totally outside of the one's specific industry. For example Steve Jobs once called Edwin Land, the man who invented instance photography, "one of the great inventors of our time," and also once said Land was "a national treasure."
While previously successful banks should be noted, Bank of America mustn't look toward only financial firms for inspiration to innovate and examples to emulate. If it is to ultimately succeed in the industry poised to undergo dramatic changes in the coming years, it must be willing to broaden its outlook to find new inspiration.
It's easy to think Bank of America has nothing to learn from technology firms like Apple. Yet it turns out one of the first places the bank should look for inspiration to succeed is the same place more than 14 million of its customers look to check their balances -- their phones.
The one banking firm already following Apple's lead
There is no denying the banking industry is poised to change. And while Bank of America and others are doing their best to respond, there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.