Banks and disintermediation, Part One and Part Two and Part Three
Financial Services Club Blog by @Chris Skinner reminds us all that this isn't the first time the future of the financial industry has been threatened, but is quick to point out the big changes that reshaped the business model.
“Twenty years ago, everyone shouted that banks would be disintermediated. Everyone said that Microsoft, Virgin and Walmart would take over. Everyone pointed at Beenz and Flooz as the new forms of money. None of it happened. Maybe it never will.
It is why I now talk about component-based banking, because I do believe the banking business model will change. But will banks disappear? No. They will adapt. Banks will evolve to become integrators of the best bits of software out there. They will find the APIs, apps and cloud-based data needed to integrate services into the best-of-breed components that suit the customer best.”
"Bradley Leimer: If every bank and credit union (regardless of scale) had a fully functional online and mobile banking application, then by all means I would suggest playing in the wearable space. The key is to envision what type of financial information is relevant (and what experiences might be best mapped) to a simpler function on a wearable. For most banks and credit unions, wearables will be a wait and see – and will be very partner dependent. It’s time to break out of that mode of thinking and see development beyond our big fintech providers.
Michal Panowicz: In my opinion, wearables, given the state of user installed base (minimal) and financial’s general digital readiness (less than minimal) are a distraction. If I were to chose – crack mobile first – really, really well. Put all resources here before a single man day is spent on wearables."
How Modern Consumers are Redefining Their Relationships with Banks
Bank Director.com’s @Sicily Axton on relationships between banks and consumers being increasingly decided by mobile banking.
“Starting at the end of last year, there has been a spike in the number of people who are switching banks. According to a study by AlixPartners, in the first half of last year, about 7 percent of people switched their checking account provider, and that number jumped to 10 percent by the end of the year. That’s the highest it has been since reaching 13 percent during the financial crisis of 2008. Today, mobile technology is driving the switching. Sixty percent of smart phone or tablet users in the last quarter of 2013 said mobile banking played an important or extremely important role in their decision to switch.”
"The first, most crucial step is to find ways to communicate with customers and find out what needs they have that are not currently being served. A while back, I helped a bank in Michigan come up with different marketing strategies to help them gain and retain clients. I asked many of their business clients to attend a focus group to find out more about their goals and how the bank could help them. The consensus among participants was that they wished the bank could help them grow and manage their business. That’s different. And the bank had the resources, and the client base, to do it."
How Wells Fargo Learned To Innovate Around the Customer
Forbes’ @Greg Satel profiles Wells Fargo EVP Steve Ellis, the man responsible for changing the company's culture.
“A lot has changed since Steve Ellis attended that payments conference which changed the course of his career and Wells Fargo’s business. In 1999, the bank was doing zero transactions online. Today, Ellis’s commercial banking unit processes $11 trillion dollars per year on the Internet. Still, he believes that the biggest changes are still to come.”
How Marc Andreessen’s Twitterstorm on Timing Relates to Bank Innovation
Money Summit’s @Jon Ogden pairs recent advice from Marc Andreessen and Ron Shevlin to determine if the timing is right for banks to innovate now.
“The most innovative companies (the ones that are first to market) don’t always win. It can be better to sit back, monitor the markets, figure out the appropriate timing, and then execute better than anyone else.
The obvious example here is Apple. Both the MP3 player and the tablet existed long before the iPod and iPad hit the scene, but the timing hadn’t been right. Apple went to market at the right time, and they brought together a few critical ideas such as iTunes, an app store, killing the stylus, beautiful marketing, and so on. All of this led to the wild success of the iPod and iPad.”