Banking Innovation: Banks Late For Fintech Party
With new entrants to the banking market, new business models being created, changing customer expectations and breaking down of traditional services are all putting traditional banks under pressure. Local banks are having difficulties when it comes to innovating. The main problem as I see it is that banks have one rule: avoid risk. Which late comers in FinTech (Financial Technology) don’t follow these rules.
The ability to bank online or send money from the comfort of your home is now deemed a necessity by those between the ages of 18-60. We see that 31% of people now see online banking as the top factor, whilst mobile banking, customer support and convenient access to branches are also important. In 2000, convenience was on top of the list, with most people choosing a bank because it was nearest to their home or it was easy to withdrew money from.
Bill Gates once said ‘The world needs banking, but it does not need banks.’Was he right or was he wrong?
We have seen Steward Bank going branchless with Agent Banking model. So is the branch dead? Well who knows for sure, but the received wisdom and the empirical evidence certainly indicates that the purpose of the branch is changing and we are not afraid to tell you that in 10 year time they will only be one branch per bank in the CBD.Why have more branches when you can have agents? With traditional branch banking services moving online, the high streets are seeing branches of the most established banks disappear.We didn’t knew that was coming, right? And if banks want to keep on banking, they must innovate.
Innovation is scary when it comes to banks, mainly because we don’t want people innovating with our monies . Most importantly, banks are run by groups of specialists. When these specialists are assessing the need for an upgrade or a change, the decision is scrutinized by hundreds of people ,all with different opinions.
With new “FinTech” companies like Ecocash and Getbucks on the rise which don’t have the same obstacles as banks do, consumers are starting to pay attention to FinTech companies.
The future of banking is online. And as customers we want our information on demand. There are still gaps in banking that have to be filled. However, the rate of innovation in 2016 will only increase as banks look to improve the way they interact with consumers.
Every company has to innovate: adapt or die. Traditional banking is being left behind, fading into the background because of developments like mobile banking, contactless payment and non-traditional players entering the field.
Today’s digital customers have higher expectations than ever. To be fruitful, banks need to harness new innovative methods to attract and retain customers through highly relevant and personalised experiences across multiple channels.
Imagine if we could open a bank account online without the need to visit a bank?