Who has the edge in the transformational era of banking?
By: Evelyn Jordan for https://blogs.retailbanking-academy.org
With what seems like the whole world focused on the transformational era in banking and what innovation in the sector will mean for us all, it is easy to get caught up in discussing who will win the battle for supremacy between big retail banks and fintech businesses.
While the banks fight to lock down and decide what their own unique selling proposition will be in an evergreen, ever-changing and competitive, technology-driven banking landscape, fintech companies are entrepreneurial and move quickly with fancy new apps and ways to pay like Bitcoin, Apple Pay and Google Wallet.
In addition, discussion from a selection of high-level decision makers at banks from all over the world at our recent Executive Management Programme held last week revealed that legacy systems are also preventing some retail banks from innovating as they are forced to invest in IT infrastructure upgrades in order to just keep up with the market.
As intended, delegates at the three-day event found common ground and were able to discuss solutions to this problem and others were relieved that they’re particular set of challenges were not unique to them.
One future outcome for banking transformation could be that banks are forced to have no choice and use their buying power to merge with and acquire leading fintech companies in order to play a bigger role in determining the future direction of retail banking.
What I do know is that the ‘who will win’ discussion should not forget a third party, who collectively, have arguably even more buying power than the banks. Customers, particularly millennials who may refer to cheques in the same vein as cassette tapes or VHS, hold the balance of power and can sway the outcome with their decision to login, swipe, click or tap.
Personally, I urge both sides to ensure that their efforts are centered on the needs of customers because not only will this help make retail banking an internationally recognised profession but this is where the biggest gains can be made for banks that are focused on the bottom line.