Digital Banking 22
Never mind if Fintech fails to take over the world
I would like to start today with a chart I found from CB Insights on the reasons why startups fail - fintechs included. And no surprise, they turned out to be the usual suspects. Attention to the first three. Years pass by, consultants come, business schools analyze, gurus have an opinion ... and it turns out that your product needs to have market, you must have funding ... and your team must be the appropriate. Shocking, isn't it?
Fintechs. Today I read an exciting post. Exciting because it is one of the first I have read talking about impacts other than the everyone-talk-about ones - https://medium.com/@avinashswamy/how-fintech-can-disrupt-enterprise-it-more-than-banking-97e0546fa39c#.mp3mpyg25. While I reckon Fintech will not disrupt itself the financial industry, it will provide the means for the evolution of it; the threat to the big banks will not be Paypal or Lending Club ... but the medium-sized banks eager and committed to change their business model applying the changes brought by the Fintech. From this point of view, I find extremely interesting the UK government promoting the new digital banks; it will mean a change in the entire British financial market.
The regulation, the cost of acquiring a customer, the trust building (when it comes to look after someone else's money, we are talking about a different relationship to sell a book, a jumper or a car) ... or any of the reasons mentioned previously are resulting in no really groundbreaking Fintech. But this should not lead banks to complacency, because the reality is that the world has indeed changed. "Never mind if Fintech fails to take over the world, or even the current account: its emergence is changing the face of finance" - www.economist.com/news/special-report/21650296-fintech-has-made-inroads-incumbents-still-dominate-day-day-banking-how. And banks must respond to this changing world ...
If the Gallup data are accurate, would it make sense for banks to reduce by 40% their branch capacity? And to reduce by 60% their contact centres? Someone will argue that no, that we can not misunderstand quantity and quality, that though visitors are declining higher value-added activities are currently being performed. I leave it up to you. Some banks will use the data - ... mmm, one of the lessons of this phenomenon called "big data" ... using information - to change the operating model. Others will not.
And as expected, banking has changed throughout history, it is currently changing and will change faster in the near future ... http://www.americanbanker.com/bankthink/the-great-rebundling-of-financial-services-1077172-1.html?zkPrintable=1&nopagination=1
Have a great week
The regulation, the cost of acquiring a customer, the trust building (when it comes to look after someone else's money, we are talking about a different relationship to sell a book, a jumper or a car) ... or any of the reasons mentioned previously are resulting in no really groundbreaking Fintech. But this should not lead banks to complacency, because the reality is that the world has indeed changed. "Never mind if Fintech fails to take over the world, or even the current account: its emergence is changing the face of finance" - www.economist.com/news/special-report/21650296-fintech-has-made-inroads-incumbents-still-dominate-day-day-banking-how. And banks must respond to this changing world ...
If the Gallup data are accurate, would it make sense for banks to reduce by 40% their branch capacity? And to reduce by 60% their contact centres? Someone will argue that no, that we can not misunderstand quantity and quality, that though visitors are declining higher value-added activities are currently being performed. I leave it up to you. Some banks will use the data - ... mmm, one of the lessons of this phenomenon called "big data" ... using information - to change the operating model. Others will not.
And as expected, banking has changed throughout history, it is currently changing and will change faster in the near future ... http://www.americanbanker.com/bankthink/the-great-rebundling-of-financial-services-1077172-1.html?zkPrintable=1&nopagination=1
Have a great week
