One of the key concepts from the critically acclaimed book, “Atomic Habits” by “James Clear” is about creating and following simple systems; whereby making it easy to develop better habits. An atomic habit is a regular practice or routine that can become a source of incredible power.
According to James, one of the ways to developing better habits is by using the “Law of Least Effort” – By creating an environment where doing a positive act is easy. This concept emanates from the core understanding that humans are tuned at a genetic level to take the path of least resistance. A learning that various technology and media platforms have resorted to for instigating mass adoption or consumer acquisitions.
Think Apple and its ability to build iPhones as a gateway to an ecosystem; or Uber and its ability to simply present a chauffeur driven car at your doorstep; or Airbnb and its ability to simplify hospitality experiences. Fintech’s have brought this convenience to the otherwise highly document driven banking process.
Banking in India has taken considerable process simplification through Jan Dhan Yojna to expand its fold and take banking to the masses. The integration of Aadhaar and mobile have further removed the entry barrier for millions of Indians and laid the foundation for fintech’s and banks to further push products that improve financial inclusion and adoption.
In this race to win customers and expand presence, the agility and innovative approach of the fintech’s resulted into a big advantage over traditional banks. In doing so, technology, minimal documentation and speed of delivery contributed to creating a path of least resistance for the customers. At the same time, data analytics, sustained portfolio mapping and using the circle of interconnected consumers leads to protection against asset quality risks.
One of the success stories in banking in a few countries has been the rise of SuperApp. This concept seeks to offer a single platform access to various services and portals that customers would wish to tap to use their bank account. In India too, various banks have tried to build an app ecosystem by offering ecommerce, payment solutions, investment platform integration, etc. through their mobile banking apps. This is one way of capitalising on the path of least resistance to garner sustained customer engagement.
In the new age of banking, laying a path of least resistance can be a potent answer for banks to compete or collaborate with fintech’s. The success of payments solutions is one such example of easing access and enabling behaviour change among customers in a faster manner. There are similar opportunities awaiting – be it extending credit or facilitating investments or even enabling wealth creation among diverse consumer segments. In a world which is becoming flatter, the road to success often begins with removing obstacles to offer a smooth, easy and frictionless ride.
The author, Neeraj Sinha, is the Head - Retail and Consumer Bank at SBM Bank (India). The views expressed are personal.
First Published: IST