31 October 2014

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Jonathan Davis - FIS EMEA

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Banking in the new digital age

23 July 2014  |  2386 views  |  1

Congratulations to the FCA and PRA for lowering the barriers to create new banks. So far five new players have openly stated their intentions to enter the market. This is a good step forward, but these organisations have a great deal to do before they can open their doors to the waiting public. At the other end of the spectrum, the big, traditional players have much to do if they are to keep pace when the competition really starts to intensify. Both face a similar problem: running their operations cost effectively and keeping customers happy.

Traditional banks won't exist by 2025, or so PwC says. New market entrants have the potential to turn banking on its head.  They come with fresh thinking, a new perspective on customers, products and finance and will be unencumbered by the burdens of legacy competitors – existing players take note.

The new entrants are likely to find it easy to integrate into the connected world. They will also have learned from the challenges afflicting their established rivals and are better placed to avoid falling into the same traps. The banking disruptors may bring lessons learned from innovating in other sectors. But today’s banks have deep-rooted financial services experience and have an existing customer base. Despite what the media portrays, these customers believe that retail banks are trustworthy when it comes to helping consumers with their financial management.

For any player, new or old, to succeed in this new banking ecosystem, they will need to invest in new technology and move away from legacy platforms housed on-site. They need to take a fresh approach to technology, seeing it not as a source of competitive advantage, but as a utility that can be hosted anywhere, yet controlled by the business. This is a digital world. For the sceptics, just ask your children how they want to manage their money. But it’s not just today’s youngsters who are changing their demands; the connected generation (“Generation C”) crosses age groups, and are defined by the way they interact with the world. Banking needs to move with the times if it is to remain relevant.

Enter technology partners. They have the expertise and the experience to implement the best banking strategy, tailored to the different needs of banks big or small. They can help to launch legacy vendors and new competitors into the digital era so they hit the ground running. This is a golden opportunity for banking; ignore it and existing banks risk becoming a page in the history books.

TagsMobile & onlinePayments

Comments: (1)

Vinod Sekharankutty - Infosys Ltd - London | 24 July, 2014, 13:57

While technology on tap /demand as a utility is useful for the traditional core processing, the rapid changes from the ecosystem would mean that the new entrants would still need a very responsive approach and one that does not make them be at the mercy of an external provider all the time. So it is a balance to be struck between outsourcing elements of technology vis a vis ensuring that you still have control over what you want to do to achieve some degree of differentiation be it in service delivery, product variety/relevance to pricing..

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Jonathan Davis

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Managing Director

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FIS EMEA

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