Banks aren’t only competing with Silicon Valley, they’re competing with smart companies who see a tremendous opportunity.
Why is it so hard for big banks to innovate their way out of this chaos?
Don’t you think banks should do payments or money transfers better than someone who’s never done it before?
If the banks are not careful, they’re going to be cut out of the value chain completely (though every so slowly):
- Transferwise is 3 years old and has sent over £1B. “We discovered that to get rid of these charges we simply needed to skip the banks altogether .”
- If the mobile phone is the new bank branch, why wouldn’t the telcos own your banking? Especially if payments are made via SMS.
- UK Newspaper launches wealth management services. Pivoting on trust: “When it comes to money, trust is crucial and The Times and Sunday Times have been the papers of record for the latest money, investment and business news and advice for more than two hundred years…”
Unfortunately for banks, it’s not just about competition. It’s also about a changing customer & market profile:
Millennials don’t have the same barriers to switching banks as their predecessors & they view safety as the opposite of innovation. Meaning, they’re not even going to think of the banks when they explore innovative alternatives to traditional banking products.