This document summarizes current and future threats facing the retail banking industry. It identifies four circles of threats ranging from most immediate to most strategic. The inner circle represents new direct banks that offer superior customer experiences. The next circle includes retail giants expanding into banking. The third circle consists of single-product financial services providers. The outermost circle involves potential disruption from technology and mobile companies accumulating customer touchpoints. The analysis aims to help banks understand threats and consider strategic responses to changing customer expectations and new competitors.
North American banks must chart a new course to capture emerging opportunities. They must shift their operating philosophy from a product-oriented organization to a customer-driven organization and embrace and integrate new technologies, channels and strategies. Read this white paper to learn about the three building blocks for sustainable, competitive advantage for banks: optimization and simplification, agility, and continuous innovation. Adopt these building blocks and make your bank thrive in 2020.
Mobile Payments: How U.S. Banks Can Deal with Disruptive ChangeCognizant
Banks are well-positioned to benefit from mobile payments, if they invest in the technology infrastructure and forge strong partnerships to out-maneuver emerging non-traditional players.
Mobile solutions are seemingly everywhere these days, and laptops,
tablets, and smartphones are enabling an “anytime, anywhere”
approach to business and personal lives. This is starting to include
payments. In news reports and ad campaigns, consumers are learning
that they can use their mobile devices to buy anything from a
Starbucks coffee or a Big Mac to office supplies, lumber, and clothing.
The age of mobile payments, it seems, is upon us. For more info: www.nafcu.org/vantiv
Mercer Capital's Bank Watch | April 2017 | Is FinTech a Threat or Opportunity?Mercer Capital
Brought to you by the Financial Institutions Team of Mercer Capital, this monthly newsletter is focused on bank activity in five U.S. regions. Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions, providing insight into financial institution valuation issues.
North American banks must chart a new course to capture emerging opportunities. They must shift their operating philosophy from a product-oriented organization to a customer-driven organization and embrace and integrate new technologies, channels and strategies. Read this white paper to learn about the three building blocks for sustainable, competitive advantage for banks: optimization and simplification, agility, and continuous innovation. Adopt these building blocks and make your bank thrive in 2020.
Mobile Payments: How U.S. Banks Can Deal with Disruptive ChangeCognizant
Banks are well-positioned to benefit from mobile payments, if they invest in the technology infrastructure and forge strong partnerships to out-maneuver emerging non-traditional players.
Mobile solutions are seemingly everywhere these days, and laptops,
tablets, and smartphones are enabling an “anytime, anywhere”
approach to business and personal lives. This is starting to include
payments. In news reports and ad campaigns, consumers are learning
that they can use their mobile devices to buy anything from a
Starbucks coffee or a Big Mac to office supplies, lumber, and clothing.
The age of mobile payments, it seems, is upon us. For more info: www.nafcu.org/vantiv
Mercer Capital's Bank Watch | April 2017 | Is FinTech a Threat or Opportunity?Mercer Capital
Brought to you by the Financial Institutions Team of Mercer Capital, this monthly newsletter is focused on bank activity in five U.S. regions. Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions, providing insight into financial institution valuation issues.
Innovation In Banking: Hidden Opportunities in the Forces Propelling ChangeInfosys Finacle
With Darwin’s theory playing out in the last couple
of years, surviving financial institutions are
confronted with multiple challenges. On the
external front, banks are trying to: reclaim the trust
of increasingly strident, demanding consumers;
tackle competition from established and emerging
rivals and; comply with tougher mandates.
Internally, their biggest challenges include
adjusting to restructuring, consolidation and
improving operating efficiency. To top it all, the
quest for a competitive edge requires them to
imbibe best practices from peers and other
industries, and keep pace with new technologies.
Virtual currency would play a role in disrupting the conventional transaction models and have a potential impact on various sectors. Know more about the trends and the multiple challenges faced by businesses in adopting the virtual currency. Download the Business Research report by Aranca.
This report was commissioned by NetHope with a charitable contribution from Visa's Financial Inclusion Unit. Research for this study, both primary and secondary, was conducted by Deloitte Touche Tohmatsu India LLP.
Technology-driven change has become a constant for merchants,
financial institutions, and processors. That reality has created a shifting
landscape of new capabilities, new competitors, new rules, and new
customer expectations. It can all be complicated and confusing, but an
assessment of that landscape indicates several clear trends affecting
the industry. For more info: www.nafcu.org/vantiv
Global payments community consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for- profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results.
Bank innovation - PwC Study on When the Growing Gets Tough: How Retail Banks ...Jeff Grill
As the United States emerges from the financial crisis, retail banks are striving to outperform their competitors while grappling with unprecedented regulatory challenges and shifts in consumer behavior. For more information see http://www.pwc.com/us/en/financial-services/publications/viewpoints/viewpoint-when-the-growing-gets-tough.jhtml
Perspective: The rise and rise of emerging market banksInfosys Finacle
www.infosys.com/finacle
The emerging market banks which were plagued by excess regulation and inefficiency a few decades back have finally come into their own and are here to stay.
Four technology super trends and their impact on banking: digital society, big data, everithing joins up, integrity and security.
Customer: convinience, safety, personalization
Challenges for the Future of Retail BankingDesignit
Digital transformation in retail banking is a thriving and complex phenomenon. We at Designit try to make sense of it by identifying leading trends in three deeply interdependent categories: new enabling technologies, new customer expectations, and new strategic trends. The future holds uncertainty and promise, but some immediate actions are patently necessary for banks that want to stay relevant in an increasingly dynamic scenario.
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market PlaceCatherine Lynch
Results of a survey sponsored by SAP conducted by Pierre Audoin Conseil with global banks to highlight what innovations they are adopting to stay competitive and stay afloat.
Innovation In Banking: Hidden Opportunities in the Forces Propelling ChangeInfosys Finacle
With Darwin’s theory playing out in the last couple
of years, surviving financial institutions are
confronted with multiple challenges. On the
external front, banks are trying to: reclaim the trust
of increasingly strident, demanding consumers;
tackle competition from established and emerging
rivals and; comply with tougher mandates.
Internally, their biggest challenges include
adjusting to restructuring, consolidation and
improving operating efficiency. To top it all, the
quest for a competitive edge requires them to
imbibe best practices from peers and other
industries, and keep pace with new technologies.
Virtual currency would play a role in disrupting the conventional transaction models and have a potential impact on various sectors. Know more about the trends and the multiple challenges faced by businesses in adopting the virtual currency. Download the Business Research report by Aranca.
This report was commissioned by NetHope with a charitable contribution from Visa's Financial Inclusion Unit. Research for this study, both primary and secondary, was conducted by Deloitte Touche Tohmatsu India LLP.
Technology-driven change has become a constant for merchants,
financial institutions, and processors. That reality has created a shifting
landscape of new capabilities, new competitors, new rules, and new
customer expectations. It can all be complicated and confusing, but an
assessment of that landscape indicates several clear trends affecting
the industry. For more info: www.nafcu.org/vantiv
Global payments community consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for- profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results.
Bank innovation - PwC Study on When the Growing Gets Tough: How Retail Banks ...Jeff Grill
As the United States emerges from the financial crisis, retail banks are striving to outperform their competitors while grappling with unprecedented regulatory challenges and shifts in consumer behavior. For more information see http://www.pwc.com/us/en/financial-services/publications/viewpoints/viewpoint-when-the-growing-gets-tough.jhtml
Perspective: The rise and rise of emerging market banksInfosys Finacle
www.infosys.com/finacle
The emerging market banks which were plagued by excess regulation and inefficiency a few decades back have finally come into their own and are here to stay.
Four technology super trends and their impact on banking: digital society, big data, everithing joins up, integrity and security.
Customer: convinience, safety, personalization
Challenges for the Future of Retail BankingDesignit
Digital transformation in retail banking is a thriving and complex phenomenon. We at Designit try to make sense of it by identifying leading trends in three deeply interdependent categories: new enabling technologies, new customer expectations, and new strategic trends. The future holds uncertainty and promise, but some immediate actions are patently necessary for banks that want to stay relevant in an increasingly dynamic scenario.
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market PlaceCatherine Lynch
Results of a survey sponsored by SAP conducted by Pierre Audoin Conseil with global banks to highlight what innovations they are adopting to stay competitive and stay afloat.
With the wave of digitization, there is drastic increase in the usage of mobile internet. The fraudulent financial transactions are rising at par too. Financial fraud is a big business now and the figures are shooting higher in every aspect.
ATM security is one of the gravest concerns among all ATM owners and consumers. With growing ATM frauds and thefts its very necessary to follow some important security measures related to ATM usage or purchase. Here are some basic and important security measures to be followed to avoid ATM frauds.
In order to develop a fact-based perspective, The Economist Intelligence Unit (EIU), sponsored by Hewlett Packard Enterprise, has conducted parallel surveys of more than 100 senior bankers and 100 Fintech executives. The objective is to determine their respective views on the impact of Fintech, the strengths and weaknesses of the participants and the likely landscape for the retail banking industry over the next five years.
Innovating banking: Lessons from the world’s leading innovators Pauline Mura
Banking is at a crossroads. Banks today are confronting increasing regulation and compliance
costs, an alarming rise in security and fraud, and more ardent customer demands – all as a
result of innovative new technologies and the emergence of aggressive, non-traditional
competitors. For many banks, profits are stagnating.
1
Regulators are stepping up enforcement across a number of areas, including consumer
protection, anti-trust, money-laundering, foreign-exchange trading and sanctions violations.
Cyber security has risen to the top of the risk agenda at financial institutions of all sizes, with
banks’ integral role in payment ecosystems leaving them entangled in the often messy
aftermath of security breaches and consequent economic and reputational loss.
To redress challenges in financial performance, banks continue to seek operational
efficiencies – simplifying operations, searching for scale efficiencies and rationalizing branch
networks. But cost savings are not enough. Generating new revenues will depend upon much
better understanding of customer demands, with banks needing to embrace novel ways of
penetrating deeper into the lives and habits of both retail and business customers
How Banks Can Close the 'Value Gap' and Regain Customer TrustJoseph M Bradley
Across the globe, banks have faced a wide array of challenges in recent years. At a time of rapidly changing consumer expectations, upstarts from outside
the traditional banking industry have used technology to disrupt incumbents.
Solving Financial Constraints with Innovative Funding SolutionGilbert Tam 譚耀宗
After the credit crunch in 2008, SMEs though they are amounted to the 80-90% of business activites but their access to funding has been greatly impacted by the traditional lenders, banks, that after the 2008 credit cruch are reluctant to maintain such business if no "bricks and mortar" are provided by sellers.
The convergence of non-traditional rivals and heightened global regulation are creating new digital opportunities for banks. To seize the high ground, banks need to think like disruptors and apply modern digital tools, techniques and partnership strategies.
A very interesting report explaining how a collaborative model is taking place between traditional banks and FinTechs, whose strengths and weaknesses are very much complementary to each other.
Rebuilding Customer Trust in Retail BankingNoreen Buckley
An IBM White Paper by Mike Hobday Banking Practice Leader
Global Business Services UK
and Ireland
IBM & Charles Spinosa
Group Director & Leader Marketing Practices VISION Consulting
BTA Online 360 Journal Issue 10 - Learn how the retail banking business will become revolutionized (page 6), how new forms of organization simultaneously create innovation and flexibility (page 16), how companies managed to turn themselves around with the help of technology (page 54), how a hidden champion reinvented its business model through technology (page 64), and we showcase how technology helps the automotive industry to re-position itself (page 42).
Similar to W P Current And Future Threats Toward The Retail Banking (20)
Business Transformation - 3 T's (Trends, Typology, Tractions) & Future...
W P Current And Future Threats Toward The Retail Banking
1. Executive Summary August 2012
Current and future threats
toward the retail banking
industry
Research Analyst: Shai Ben-Moshe
2. August 2012
Keeping up with our tradition of sharing,
we bring you our analysis on current and future
threats in the world of traditional and retail
banking.
We hope this will put things into order and,
perhaps, provide you with new insights.
Any thoughts and comments on the matter, are
most welcomed.
Assaf Binstock | VP Customers
Head of Banking and Finance Division
Assaf.b@adkit.co.il | +972-54-8822001
Ben Fonarov Shai Ben-Moshe Dorel Blitz Assaf Binstock
Research Research Head of
Manager Manager Research
3. Banks Show Increased Concerns Over New Threats
Nowadays, the global banking and financial system faces many challenges:
proliferation of regulation, international economic crises, rapid technological
developments and social protests
A survey by EFMA shows that 54% of Growing concerns – the existing concerns
banks surveyed expressed concern augment the threat posed by the introduction of
over disruptive innovation new players and changes in the business model
Source : EFMA, Innovation in Retail Banking, the survey included 106 banks from the EU, Us Africa and the Middle East
The Result – Most banks reviewed show investment in innovation,
however, only half can indicate the existence of a thought out, detailed
2 strategy, encompassing clear targets and measurable indicators
4. Threat Circles of Disruptive Innovation
External Pressures Influencing the Banking System
Economic Pressures: Political Pressures:
- European Debt Crisis - Proliferation of
- Apprehension over Regulation
Another Recession
Social Pressures: Technological
- Social Protests Pressures:
- Changes in Habits of - Mobile &Tablet
Consumption - Big Data
Source: Adkit, 2012 - NFC
The Threats: From the Inner Circle and the most immediate to the
Outer and more long term and strategic
3
5. Innermost Circle – The New Format
Definition Traditional Banks Differentiated by a Customer Centric approach
Customer recruitment through a unique and differentiated
customer experience
Clear and simple financial products
Technically advanced direct channel communication which
allows for higher utilization
Excellent customer service – often 24/7
Retail over Banking – especially in branch design
Case in Point
In 2010, the European banking group Raiffeisen established Zuno, a direct bank whose
business model is based on the fact that most of its customers consider visiting the
branch, a burden. The bank employs 250 workers (age avg. under 30). The Result: A
total deposits sum of 0.8 billion Euros in Slovakia and the Czech republic by the end of
2011.
The threat is not technological in nature, but rather in
raising customer expectations and the superior position
4 gained by it
6. Second Circle – The “Supermarket Bank"
Definition Retail Giants Expand Their Operations into the Financial Sector
Based on retail activity model – Branches and target
audience
Brand differentiation based on customer experience “40
Years of Better” (Virgin)
Simple financial products which provides solution to 80% of
the customers
Physical branches are used for customer acquisition,
whereas the online channel is used to expand the product
portfolio (62% of Tesco’s financial products are sold online
after customer acquisition)
Case in Point
Virgin Money was founded in 1995 and is the financial arm of the Virgin corporation. In
the past couple of years the company has increased its presence in the British market,
since its acquisition of Northern Rock bank and its 75 branches. In an interview
conducted by us with a company executive it seems that there is synergy within the
Virgin Group, with cross sell orientation and a coordinated strategy.
The threat here is the creation of a retail “one-stop-shop”,
which combines different value offers
5
7. Third Circle – The “One Product Bank”
Disintegration of Banking Services to Specialized Single
Definition
Product Agents
Technological changes and the dissemination of the internet
have allowed a considerable portion of the banking services
to be offered by external agents at competitive prices
Services such as: Deposits and Checking accounts – Ally
Bank, Payments – Paypal, Credit – Zopa, Investments –
eTrade and Wealth Management– Personal Capital
Others are offering to become the mediator between the
bank and the customer and control all points of interaction –
e.g. Simple or Movenbank
Case in Point
Simple was founded in 2010 by American high tech entrepreneurs, with the purpose of
making a better bank. It aspires to become the front end to all customer – bank interaction
(mobile, phone and online - with no physical branches). The purpose of which is to create
a better and more intuitive customer experience. Simple cooperates with financial
institutions, but isn’t a bank in itself – though it certainly aspires to “replace” it.
Third party financial services providers are becoming more
accessible while banks lose their advantage of credibility
6
8. Outer circle – Game Changers
Dot.Com and Mobile Companies Posses a High Potential of
Definition
Disruptive Innovation in the Financial Sector
Companies described in previous circles are not expected to
become “classic disruptors” by creating a new market or
turning the business model on its head
However, looking into the not so far future, technological
companies within this circle (Google, Apple, Facebook) and
mobile companies may do so. Either by themselves, or
through collaboration/merger with a financial institution
Their main strength: abundance of touch points with the
customer can become their “stepping stone”
Case in Point
Isis was establishedd in 2010, and is a joint venture of three of the four biggest mobile
operators in the US. It is active in the field of mobile payments, and is built on a potential
customer base of 200M people. Last year Isis signed agreements with most payment
networks and with leading issuers in the US (Capital One, Chase). The Goal: Achieving a
substantial mobile foothold in the financial world in growing markets, such as payments.
It is hard to guess how and when these companies enter
the banking world. But when they will, they’ll leverage
7 their accumulated knowledge – the “New Currency”
9. “It is not the strongest of the species that survives, nor the
most intelligent, but the one most responsive to change”
Charles Darwin
8
10. Adkit – Knowledge That Empowers You to Succeed
Contact us to receive some of Our Methodology
our previous researches
Adkit specializes in international research that is used
• Customer segmentation in Retail Banking by managers and decision makers to reduce uncertainty
and improve their chances of success.
• Banking branch staffing models
• Loyalty Programs worldwide Companies and organizations worldwide see Adkit’s
• The RTB/CTB ratio and processes for changing it research as a crucial part of their work process when
launching a new business endeavor.
• Growth and Profitability Drivers in Credit Card
Companies Adkit has an inter-disciplinary methodology for the
• Trends & Product Innovation in Europe’s Short collection and analysis of information, based on
secondary information sources and on Adkit’s unique
Term Savings Market
ability to reach professionals and managers from all
• Boosting Sales in Retail Bank Branches
industries in order to incorporate their knowledge and
Worldwide insight into Adkit’s research.
For more information:
Assaf Binstock, VP Customers
+972-54-8822001 assaf.b@adkit.co.il
www.Adkit.com
9