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What Banks Can Learn From Google’s Toothbrush Test

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Sometimes seemingly mundane insights can help in the digital age, especially since most Swiss banks are «knotty colossi,» as Google Maps co-creator Samuel Widmann finds.

Can banks learn something from the US tech giant Google? A seminar at the School of Banking (FSB) in Zurich explored this question last week with  Samuel Widmann, co-inventor of Google Maps.

Zurich-born Widmann, and Swiss Federal Institute of Technology (ETH) graduate, brought his own company Endoxon into Google in 2006, subsequently working for the company for over ten years. During this tenure, he further developed Google Maps, thereby making a significant contribution to Zurich becoming an important location for the US company.

So much so that those working at the firm in Zurich are dubbed Zooglers. He has since left Google and is active as an angel investor, advisor to startups, and an active board member.

Missing Guiding Light

Widmann says he has at least eight banking apps on his phone, none of which he finds convincing. He attributes this to the fact that many banks are «knotty colossi», lacking a North Star, in reference to the brightest star in the «Little Dipper» constellation. In the past, navigators on the high seas in the northern hemisphere oriented themselves by the North Star, Widmann explained.

This is something that is often lacking among banks’ boards, he said: Many board members don’t know where to go, they don’t have the right mindset. Yet today, banks today are actually IT companies,» the former Google executive said.

A Costly Bet

There is a great desire among financial institutions to set new digital standards, especially to reach the younger «Next Gen» or Generation Z clientele. However, current offerers frequently don’t go beyond simple payment services or account inquiries.

The cancellation of the planned takeover of US digital wealth manager Wealthfront by UBS shows how complex it is to set up and expand a comprehensive digital offering.

Shifting Winds

While younger clientele in particular are appearing as blips on the banks’ radar, they don’t yet have the necessary means to be sufficiently attractive as digital customers. Accordingly, any commitment by an established bank to the digital world today is a costly bet on whether enough customers can be acquired over time.

In times of zero interest rates, such ambitions could be easily financed. But with central banks now having exited loose monetary policy stances, the winds have changed and such investments may no longer be profitable, UBS’ Wealthfront example illustrates. However, the FSB seminar also showed that the demand for digital tools or even for a super app from the banks is not necessarily given.

Many customers do not want to completely commit themselves to a single bank. Moreover, data protection and privacy pose a high hurdle, especially in Switzerland or Germany, to offering apps that are as comprehensive as they can be, and many Swiss are still unwilling to entrust their data to a financial institution abroad. When a new generation of customers emerges who are more willing to share their data, this may come to pass. But we are still a long way from that.

Larry Page’s Toothbrush Test

Swiss banks can certainly learn from what Google co-founder Larry Page once called the «toothbrush test.» A product should be such that it is used as many times a day as possible, as Widmann explained.

That requires boards of directors with the necessary know-how, and prepared to resolutely promote digital developments, but keeping in mind that the local market is limited in its dimensions. All the more, this requires a vision, just as Google had one to differentiate itself, Widmann says. Indeed, the search-engine race is illustrative.

First Mover Outpaced

A look back at the efforts as early as 1995 to establish search engine dominance, two companies, Altavista and Yahoo, entered the market and laid down their markers. Nevertheless, after 1999 Google succeeded in becoming today’s undisputed number one and outshone its two rivals. Altavista no longer exists, and Yahoo is now a niche player.

In this respect, there are cards still left to be dealt out in terms of banking. With a clear view of the North Star, Larry Page’s toothbrush test, and the willingness of boards of directors to launch digital innovations in a more targeted and user-friendly manner, lessons are to be learned from Google.

And when it is all over, someone will be smiling brightly at the end of the digital app toothbrush test.

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