25 May 2017
Anne Leslie-Bini

RegTech 3.0

Anne Leslie-Bini - BearingPoint

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Disruption in Retail Banking

Growth in internet and mobile technologies has transformed many industries and economies. The market forces and competitive landscape has completely changed in many sectors. iTunes has fundamentally changed music industry, Amazon has driven most big brick and mortar book sellers out of business, Expedia is one of the worlds' biggest travel company….. the list goes on. Internet and mobile technologies are big disrupters for most industries. What started (and tapered a bit!) with the dot com boom of 2000 has become a lethal threat to most business models today. Powered by mass adoption in mobiles phones, proliferation of smart phones and cheaper band-width, internet and mobile technology have changed many industries. The banking industry in has been dominated by a handful of big global or regional banks for 100s of years. While the credit crisis has shaken this industry, the core market forces for the industry have not changed. Will Innovation in Internet and Mobile technologies disrupt retail banking? Will there be 5 new names in global top 10 retail banks in 2020?

Mo’ Money Mo’ Problems: it’s time to incentivise purpose in banking

01 May 2017  |  4306 views  |  0

I want to create a lender that people don't hate” said Denise Kingsmill, the chair of the board at U.K. challenger bank Monzo. Now there’s a pithy declaration that speaks volumes about the state of the banking industry and the times we live in.

But how should we read this: are her comments simply savvy market positioning, tapping into the desiderata of a disillusioned digital generation? Or could this be something of greater substance: a refreshingly wholesome approach to rehabilitate an industry that historically ran on trust and bankrupted itself of its own currency during the global financial crisis?

In a YouGov survey from 2013, a mere 4% of participants declared that they believe banks observe high ethical standards, putting the banking industry on a par with online gambling and betting. Results from the same survey indicate that only 17% of participants have faith in their bankers to tell the truth, with the financial industry revealed as being the least trusted industry of all.

Since the financial crisis, banks have raked in nearly $1 trillion in profits, in spite of having paid a total of $321 billion in fines related to regulation and customer redress. Is it any surprise that the public perception of the financial services industry continues to be badly tarnished? Challengers like Monzo are tapping into this disenchantment, turning the widespread disdain for mainstream institutions to their advantage.

But here is the rub: even if challenger banks turn out to be ‘better’ banks from a customer experience perspective, is this enough? Can’t we, and shouldn’t we, expect more from the ‘banks of the future’?

Instead of just creating a lender that people don’t hate, how about building banks that people and society love? Instead of only having a kind and caring community inside the bank, how about creating banks that extend that spirit of benevolence to the community outside? What about building banks that not only deliver service to delight customers, but who do it with such a resolute sense of purpose that the positive externalities generated by the bank’s business are actually the reasons why customers stay and employees engage?

In a context where regulators the world over are engaged in a Sisyphean endeavour to tame international finance, maybe it is time to stop playing catch-up with the bankers who are intent on gaming the system and start framing the issue differently.

Given that the financial system is already so large that its preponderance is damaging the real economy, how about rethinking regulation and incentivizing the self-discipline that underpins banking-based-on-values, in order that there to be a reward for embedding ethics and morality into the bank’s core business?

Today, it is no longer enough to say that profit is the purpose (if it ever was); profit can only be the end-result. The time has come for banking to find a new ‘Why’. Are the challenger banks up to the challenge of leading the way?

TagsRisk & regulationRetail banking

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job title Associate Director
location Paris
member since 2014
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Anne Leslie-Bini is an Associate Director at BearingPoint, where she is part of the international team pioneering RegTech across the full scope of the regulatory value chain in financial services fir...

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