Bridging the Gap between Left and Right-brained Thinking in Financial Services
Posted by Jim Eckenrode, executive director, Deloitte Center for Financial Services, Deloitte Services LP, on August 13, 2013
Ever hear of Paul Rand? A very influential American designer responsible for the creation of many familiar corporate logos, Rand took a dim view of the creative power of American business. In fact, he said,
“The roots of good design lie in aesthetics: painting, drawing, and architecture, while those of business and market research are in demographics and statistics; aesthetics and business are traditionally incompatible disciplines.”
In essence, Rand is expressing the fundamental conflict inherent in what is described as left-brained vs. right-brained thinking in terms of processing information. The left brain assembles and organizes information to come up with a conclusion, whereas the right brain starts with the big picture and identifies the details later.
So how does this apply to the industry?
It’s easy to see that financial services is very much a left-brained industry. Logic, statistics, and process control are favored both by the leaders who have come up through the ranks and regulators who provide oversight.
One example of Rand’s “demographics and statistics” is in the area of customer knowledge. Many firms are leveraging the massive amounts of data available both internally and externally to learn more about their customers, and subsequently developing products and services that meet their needs. Not a bad way to go, as I can’t think of another industry that has more data about individuals and corporations than the financial services industry.
Another strategy that many financial services institutions (FSIs) are pursuing at the moment involves enriching the client experience, either by making it more engaging or simpler. Bank branch redesign, insurance apps for your smartphone, and online personal financial management tools are all examples of this approach.
These are perhaps two interesting areas where FSIs could use more right-brained approaches, especially when combined together. The right half of the brain controls visual interpretation – making sense of what you see – which is increasingly relevant to financial services as technology’s impact on the business continues to increase. A brief history of technology in financial services reveals that computing power was first applied to left-brained types of problems: transaction processing, accounting, and general recordkeeping. Advances in technology have evolved to focus on the customer, and thus experience and usability have become more important priorities.
Today, many FSI executives are casting a wary eye at nontraditional competitors, unburdened by legacy technology, complex operations, and increasingly strict regulatory oversight. The interesting thing about these nontraditional competitors, to my way of thinking, is not that they are less burdened by these things, but rather that they are free to hire non-financial talent to identify new solutions to old problems. As one might expect, these new, potentially disruptive industry entrants utilize a long list of technology talent: engineers of various stripes, alongside data analysts and other techie types. Quite a few have also brought individuals on board not routinely found in financial services: creative directors, art directors, and user-experience designers. Right-brained? You bet, and when combined with the left-brained engineers and analysts, these companies turn out some pretty cool products. So with respect to Rand’s challenge, maybe technology is the great equalizer. Or, should I say, neutralizer in that it allows for the right and left brain to work together to create something new.
The good news is that the industry is starting to wake up to the power of design and technology. In recent years, FSIs have brought in outsiders – from retailers, technology firms, and others – to shake things up and “think outside the box.” Similarly, there are examples of financial firms that have partnered with creative or design organizations to revamp products and services to improve appeal and usability. In essence, firms are looking for right-brained help. Can these efforts succeed, or are they “traditionally incompatible,” as per Rand’s dictum?