As the world converges to being online 24/7, with a mobile transferring the power into a customer’s hands, allowing whims to be fulfilled at one’s convenience in a fashion that most appeals to the user; is the current oligopolistic banking model ripe for collapsing?
New entrants in the market have sent signals of a potential unbundling of banks; Squirrel, ffrees and Osper tailoring everyday banking; Azimo, Currency Fair and Transfer Wise reducing the costs of international money transfer; Currency Cloud, iZettle and Go Cardless carving up payments. Loans, mortgages, and investment services all too have agile startups moulding and targeting specific demographics to provide relevant and accessible solutions at a time when personalisation is increasingly becoming an expectation. Juxtaposing this is the ‘one size fits all’ offering provided by the heavily regulated banks — the institutions which demand detailed information from us during the account opening phase, and who have access to our spending habits and income streams — the institutions which have the ability to use their big data access to create the most personalised offering possible.
So what are banks going to do? If we look throughout history, banks have been adaptable and resilient to change — from being deposit takers, they evolved to fulfil leverage needs, technology introductions (such as the ATM) and the globalisation requirements of customers. The way in which banks will evolve, however, may be more aligned to other industries as banks access hubs of agile talent in novel ways.