Bullet Trains, Banks and the Curse of Legacy
As 2014 comes to a close, it’s interesting to look back on some significant anniversaries. In the very different worlds of railways and banking 2014 marked the anniversary of the founding of two highly successful brands.
2014 was the 50th anniversary of the inauguration of the Japanese Shinkansen (‘New Main Line’ – or more commonly, dangan ressha or ‘Bullet Train’). 50 years on and the Shinkansen is still regarded as a marvel and a source of national pride. Why? Well, ‘bullet train’ appeals more to the 8 year-old child in us than ‘TGV’ or ‘ICE’, I suppose. Aside from that, though it still provides an utterly reliable, fast and uninterrupted service, through a still-expanding national network.
As 2014 comes to a close, it’s interesting to look back on some significant anniversaries. In the very different worlds of railways and banking 2014 marked the anniversary of the founding of two highly successful brands.
2014 was the 50th anniversary of the inauguration of the Japanese Shinkansen (‘New Main Line’ – or more commonly, dangan ressha or ‘Bullet Train’). 50 years on and the Shinkansen is still regarded as a marvel and a source of national pride. Why? Well, ‘bullet train’ appeals more to the 8 year-old child in us than ‘TGV’ or ‘ICE’, I suppose. Aside from that, though it still provides an utterly reliable, fast and uninterrupted service, through a still-expanding national network.
When the Shinkansen was already 25 years old, Midland Bank (now HSBC) launched First Direct. Rather like the bullet train, First Direct still seems fresh and innovative today. It’s regularly held up as an exemplar in the world of customer management, very different to its banking rivals.
Why? Well, partly because it has captured and nurtured an incredibly loyal customer base in a sector that’s characterised far more by customer inertia than by loyalty. Also, First Direct hasn’t stood still. For 25 years it’s kept pace with innovations such as SMS, chat, self-serve and mobile. However, it hasn’t always led the way and key aspects of its late 1980s core proposition remain; domestic call centres, open 24 hours a day with no IVR or call steering and a live agent always at the end of the line when you call.
The bullet train is consistent and reliable. First Direct is consistent and reliable. Customers trust both and each has been very successful in turning that trust into repeat business and advocacy.
The bullet train was built on new tracks, with new stations and new processes. It had no technical or operational legacy. First Direct is the same. It wasn’t founded as a trendy sub-brand of its parent and – against all the odds – HSBC has wisely decided to allow the First Direct brand its independence and operational freedom. Over the past 25 years the financial services sector has invested billions of pounds in new customer management tools and systems (and perhaps nothing like enough on aging core transactional platforms). But it’s the attitudes, processes and technologies which ‘lie beneath’ that allow First Direct to provide a range of service that are contemporary, but deployed in a way that’s consistently reflective of the brand.
First Direct’s parent and the other big UK retail banks still struggle to offer existing and potential customers a differentiated and valued service. Other ‘challengers from within’ have come and gone (remember Intelligent Finance?), but none have been able to replicate First Direct’s integrity and success. However, in the wake of the banking crisis, the new breed of challenger banks like Metro, Atom and Virgin may finally offer a customer-focused alternative to banking customers and a new threat to First Direct.
There is a new breed of low cost domestic airlines in Japan, seeking to challenge the bullet train. So far, they are stuck at a market share that’s a fraction of high speed rail. But, like First Direct, the Shinkansen may finally be facing significant, game-changing competition.
We’ll see – and maybe check back in 2039.
