November 4, 2013
What are some of the banking trends that will continue to grow in the coming years? Mobility is one area which banks are using as a Pivot to change the way they approach the market. It is great to see the banks accept that Mobility will be the largest channel around the World in the next year or two. The distinction as to who is a bank will continue to be debated as telecom, tech and retail banking converges even more. Customers will increasingly customize their banking interaction so we can see individual wikis come to life and grow in importance in the coming years depending on what segmentation does to the average consumer based on his Social Media Scores.
As each of these technologies grow and reach critical mass, managing the back office of banks will be very different in the future. Much like the power and energy utilities we will see the growth of Utilities in banking. The competition amongst banks will be based on long term brand values (much like JPMC and Citi compete on Card Products but the Visa or Mastercard network stays the same). Product differentiation will continue to be an area that Banks Invest in and customer experience will continue to be a differentiator in the choice of consumers to pick a bank. Already we see the non banks take over in various aspects of consumer banking. The greatest disruptor of them all, Paypal continues to see record growth, as do each of the recent mobile wallets be it Starbucks or ISIS. Net spend is doing an amazing job at Prepaid as is Amex with their Visionary blue bird strategy. M-PESA continue to grow in currency. Bitcoin must be given a lot of credit to be still in circulation (and crossing $200 value) despite recent bad press and is looking at new ways to get more traction which it will. LevelUp continues to be a preferred way to lunch for many in the midtown area and increasing its geo mix.
More and More of these innovative approaches to the consumer marketplace will continue to take market share away from the traditional banks. Firms like HCL (and their peer group) with a strong background in Technology and Operations are in a good spot to provide financial services on tap to almost all the large players in the Financial Services Value Chain. One of the most interesting aspects of the digital convergence and the digital shake out is finding new and innovative ways to serve the growing and changing needs of banks of all sizes and shapes and so increasingly the market will see even more new models that enable banks to improve their efficiency ratios even more.