Prescription for prosperity: collaborations between financial services and consumer healthcare
As we look forward to the dawn of a new decade, the sea changes inundating every corner of our lives can seem more like a crashing tidal wave: The complexities of a global economy, technological innovations and threats, and constantly fluctuating consumer expectations and behaviors have never seemed more profound. Times are changing — quickly. Financial institutions in particular can fall behind in their response to these shifting tides because of regulations, an inability to implement (or perhaps understand the benefits of) technology solutions and disruptions, or just plain inexperience.
It takes a toll. According to the PwC Retail Banking 2020 report, “customer trust is at an all-time low.” When customers don’t trust banks to lead the way when it comes to service, security, or tech — well, they won’t be customers for long. Banking leaders must make serious moves — and fast — to ensure success in 2020 and beyond. But the question remains: how?
One word: collaboration.
As the great Felix Rohatyn wrote in his book Dealings: A Political and Financial Life, “At its core, banking is not simply about profit, but about personal relationships.” Of course that’s true, but a bank’s relationships in 2020 aren’t limited to just its customers. They can’t be. They also include service providers, tech revolutionaries and other professionals from a wide range of backgrounds who can bring new approaches, innovations and, ultimately, customers to the table — all while operating from a baseline position of trust.
We can find one of the more intriguing solutions to this quandary by looking outward. Other industries, including pharmaceuticals and retail, have begun to create relationships and collaborations with cross-industry partners to develop better solutions while establishing authenticity and presence in secondary markets. Banking would be well-served by examining and implementing these models.
The possibilities of cross-industry relationships are almost limitless. A particularly complementary one, and the key focus of this article, takes place between financial services and consumer healthcare. After all, the healthcare cost and medical debt figures have never been more staggering; the impact on lending institutions, consumers and providers has never been more sobering. These issues constitute one of the most pressing and widespread issues of our time, and they offer a unique opportunity for savvy banks to step into the breach, develop creative solutions and build consumer trust and relationships.
But this type of action is often easier said than done. Here are five ideas to jumpstart collaboration with the healthcare sector in 2020.
1. Investigate untapped angles. Much like banking, healthcare is a constantly shifting and heavily regulated market. It’s also massive.
Strive for new ways to create value for consumers, institutions and even regulators, similar to how small community bank Webster Financial has positioned itself as the country’s second-largest healthcare savings account (HSA) administrator.
2. Keep your eye on the consumer — even if it’s not the consumer you think you want. It may take a little imagination to link medical debt with deposit growth, but if you’re not servicing the medical debt market, you’re losing access to nearly one in five Americans. Developing commercial relationships with healthcare providers and their patients can drive growth and build trust over the long term.
3. Look to technology to bridge the gap. If you’re at a loss as to how to broker relationships within the healthcare sector, tech can often be a connecting force. Medical providers are actively seeking solutions across all sectors to ease the burden of payment processing and debt collections — whether through acquisition, partnership or in-house R&D. Make sure any healthcare prospects you are targeting are well aware of any in-house products or outsourced tech solution that could be of use and drive your relationship further.
4. Don’t discount startups. Like financial services, the healthcare industry is awash in startups looking to cause disruption. While banks may have once been reluctant to tie their fortunes to such risky propositions, it’s becoming increasingly clear that the markets are relying on innovation to rein in healthcare costs and improve outcomes. A rather intense expectation, to be sure, but if in doubt, consider SafeRide Health a transportation startup that received recent funding from Fresenius Medical Care and is looking to reduce hospitalizations among dialysis patients via safe, regular transportation. New solutions take shape every day; make sure a key focus of your collaboration efforts is identifying those developing and selling them.
5. Make healthcare specialization a value proposition. One way to jumpstart collaboration with the healthcare industry? Jump in with both feet. Create a healthcare taskforce to drive relationship-building with providers and patients alike, and publicize your efforts. Somewhat counterintuitively, specialization can build your brand, create value and drive differentiation. Of course, healthcare (be it costs, payments or outcomes) isn’t the only market with such deep potential. But, it is one that your customer base is already deeply invested in and affected by.
To most of us, 2020 has always seemed like a far-off utopia of robotized tasks and systems, vacuum-sealed doors and food in pellet form. But alas, all the messiness and imperfections of humans and the industries we’ve built show no signs of abatement. Banking, however, has opportunities to do better in 2020 — opportunities that will increase market share, brand relevancy and consumer trust. It will take “thinking outside the branch” to work collaboratively and cohesively with markets that need financial partners, including healthcare and tech. This work can yield a flood of advantages in ways we have yet to understand — and for people we have yet to meet.
As the CEO of Epic River, Jeff Grobaski has more than 20 years of experience in fintech, ranging from a system engineer at EDS to the director of product at TREEV.
Want more BAI Banking Strategies? Sign up for our free newsletter!