17 December 2017
visit www.aciworldwide.com

Bank economists warn of disruptive threat from mobile and crowdfunding

04 July 2013  |  49138 views  |  0 Blurry Couple walking

Banks that fail to invest in mobile technology and crowdfunding platforms risk being swept away by a wave of disruptive innovation warn economists at US bank BBVA Compass.

In its just-released second quarter economic outlook, the bank's economists argue that the financial industry faces its most dramatic transformation in modern history because of increased online and mobile device usage, which will make banks more productive but also boost competition from nonbanks.

"To succeed in this new hyperconnected and competitive environment, banks will have to follow a customer-centric approach and offer simple, user-friendly and effective products, with a high level of transparency and security," chief economist Nathaniel Karp writes.

Banks are ahead of the curve in mobile technologies, the bank's economists say, after examining a 2012 Federal Reserve Board survey about mobile banking.

"Mobile banking will increase the productivity of the industry as banks will have more information and ways to efficiently target users; however, these technologies are also bringing more competitors: highly sophisticated platforms with innovative business models and very low operating costs," according to the economists.

An even bigger threat to the traditional banking industry may yet come from the advent of new crowdfunding platforms, which the BBVA economists describe as "a disruptive innovation that commercial banks cannot ignore".

They recommend that banks pay close attention to this trend, strengthening their core business and investing resources in developing their own crowdfunding models.

"For banks, crowdfunding poses a challenge," states the report. "From here on, they will face a new competitor with lower operating costs, a different approach to risk management and a simpler product offering. To what extent crowdfunding platforms will displace commercial banks in the retail and small business segments remains to be seen. However, banks should be prepared for this trend and make it work to their advantage."

Read the full report:» Download the document now 952.5 kb (PDF File)
KeywordsSOCIAL MEDIA

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Third of Europeans use mobile banking - ING survey

Third of Europeans use mobile banking - ING survey

02 July 2013  |  11705 views  |  0 comments | 12 tweets | 16 linkedin
Mobile set to overtake Web at online bank ING Direct

Mobile set to overtake Web at online bank ING Direct

26 June 2013  |  7539 views  |  0 comments | 20 tweets | 9 linkedin
Big data to drive banks' mobile wallet strategies - Finextra research

Big data to drive banks' mobile wallet strategies - Finextra research

10 June 2013  |  20337 views  |  2 comments | 46 tweets | 35 linkedin
New breed of money spending advisory apps set to disrupt payments value chain

New breed of money spending advisory apps set to disrupt payments value chain

31 May 2013  |  7967 views  |  0 comments | 5 tweets | 5 linkedin
ING Direct backs Oz crowdfunding platform for social entrepreneurs

ING Direct backs Oz crowdfunding platform for social entrepreneurs

02 May 2013  |  6491 views  |  0 comments | 4 tweets | 2 linkedin
Crowdcube becomes first regulated crowdfunding platform

Crowdcube becomes first regulated crowdfunding platform

04 February 2013  |  10033 views  |  0 comments | 16 tweets | 4 linkedin
Kickstarter comes to the UK

Kickstarter comes to the UK

11 October 2012  |  7574 views  |  0 comments
Australian and UK regulators warn on crowdfunding risks

Australian and UK regulators warn on crowdfunding risks

14 August 2012  |  7868 views  |  0 comments
Crowdfunding site for entrepreneurs Symbid goes English

Crowdfunding site for entrepreneurs Symbid goes English

22 June 2011  |  9640 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.thomsonreuters.infovisit www.atos.netvisit www.niceactimize.com

Top topics

Most viewed Most shared
satelliteRipple completes XRP Lockup
10643 views comments | 3 tweets | 2 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
10278 views comments | 18 tweets | 36 linkedin
Banks tap Ethereum smart contracts for MiFID II complianceBanks tap Ethereum smart contracts for MiF...
7650 views comments | 10 tweets | 10 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
7340 views comments | 19 tweets | 22 linkedin
hands typing furiouslyReshaping Customer Engagement & Da...
6763 views 0 | 4 tweets | 2 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job