Banking on the Future of Banks Could Be Risky
Recently, Gilead Sanders conducted a strategic foresight retreat for Sogebank, the second largest commercial bank in Haiti. With over 150 employees attending, Gilead Sanders led the team through a series of “scenarios” around such themes as the virtualization of currency; the rise of the self-banking global customer; and the use of Big Data used to customize services for a growing consumer base that increasingly has access to more information and automated services.
Banks, like many other institutions are feeling the pressures of a changing marketplace with the acceleration of technologies and an increasingly mobile consumer-base whose need for face-to-face interactions are decreasing as they choose to access services anytime, anywhere seamlessly and without interference. The roles of banks and banking in general are changing, and the threats and opportunities for the industry are rising from three distinct trends:
The virtualization of currencies as consumers begin to adjust to making purchases using mobile technologies and digital platforms such as the Ripple Payment Protocol
The rising competitive landscape of adjacent competitors through digital payment gateways like Coin, Google Wallet and M-Pensa that provide consumers the option to pay for purchases directly using mobile technologies and bypassing banking institutions.
The growing opportunity for consumers to share personal data with institutions through social networks and digital platforms to gain valuable information that help them make informed decisions based on customized life goals.
These trends are already well under way and are already reshaping the monetary landscape. Money transport companies like Brinks, Dunbar and Loomis are sure to feel the pinch in the next decade as more consumers transfer their transactions to more digital platforms and physical currencies begin to disappear. Banking institutions will begin shrinking their physical footprint as more clients choose to perform self-service banking through mobile portals. And, the market promises to splinter as more consumers begin to spread their need for financial services across multiple institutions and services that provide a high level of security and convenience with much greater and variable value offerings.
Like so many industries, the banking community is attempting to adjust fast and trying to predict what the greatest needs for consumers will center on. And, although they cannot predict the future, banks can begin adjusting their business models to accommodate the market no matter which direction it flows. Many larger institutions in the U.S., Latin America, Europe and the Caribbean have already begun experimenting with such measures. Banking institutions should begin to think or deploy the following:
Establishing a digital “ecosphere” that allows clients to do many of their banking services digitally, but also provides them with the opportunity to reach out to strategic partners and lead practitioners through various portals for many of their long and short-term financial decisions. (video, social media, sms text, wearable technologies)
Using Big Data Analytics to segment your client base to deliver just in time services for both information and products based on usage and historical data. This will lead to personalized banking based on customized individualized data sets.
Developing services around “personalized banking” that take into consideration the client’s current and anticipated needs by mining private and public data and knowledge to anticipate requests and transform information into intelligent, usable knowledge for the client and the institution.
Crowd source products and services based on “feedback loops” from consumers to create an environment that resonates and customizes itself to what they need anytime, anywhere.
Create strategic partnerships with other financial services using technologies to bundle and offer seamless access to what the client needs continuously form cradle to grave.
Groom bankers to become thought leaders and facilitators to help clients achieve long-term goals (college, retirement, home buying etc...) using digital platforms to provide concierge services.
These trends will change the banking industry as we know it, but how institutions choose to respond today will dictate how they will fare into the future. In our latest White Paper The Future of Banking in the Caribbean & Latin America, Gilead Sanders explores the shifting sands for banking institutions in emerging markets and how these trends will change consumer behavior even in what was traditionally known as depressed sectors.
Gilead Sanders’ team is well equipped to help banks and other financial institutions face an uncertain future by focusing on emerging trends and responding through innovative approaches and strategic forecasting. Contact us, and let us show you how to lead the change in your financial.