Interesting interview with Huy Nguyen Trieu- Global Fintech Influencer .
In reality its the consumer who will decide whether our traditional financial institutions will have relevance in the future- and that future is being shaped now.
As we all know, the "Facebook Generation" are entering their prime earning capacity over the next 10 years and they are a different type of consumer from the one that the banks have been serving to date. They want their bank on the phone in their pocket. Period.
Disruptive technologies such as mobile banking apps, Crypto-currencies, robo advisors etc. enable consumers to carry on their lives without the need for traditional bricks and mortar banks. Technology also allows consumers to receive increased service choice at reduced cost.
But does this technological disruption mean the end of banks as we know them.
The Regulators of the financial services industry are also aware of, and reacting to, this Consumer driven change - as evidenced by PSD2 ,and the utlisation of "regulatory sandboxes" in the UK and Australia- giving Fintech whiz Kids breathing room and space to develop their ideas and meet consumer requirements without the dead hand of regulation stifling their creativity.
The banks which survive will be those which focus on the Tech Savy consumer and deliver the services which such consumers want, in the way, and at the pricing point, that they want them.
Most traditional banks offer too many services, too slowly, utalising technology which is too old or bespoke to enable the delivery of such services in a snappy, cost effective manner, or to refocus or change their service offering quickly.
All that said, the smart banks- which A. leverage their invaluable existing customer base; and B. invest in the right technologies- through acquisition or outsourcing/licensing - should thrive- because it really is all about the consumer.
Those existing customer bases are gold dust.
Digital Transformation is in my opinion the biggest challenge faced by all large companies today, and banks are no exception. Technology (and I would include Artificial Intelligence, predictive analysis, but also Amazon Web Services or the cloud in general) has suddenly permitted the emergence of new competitors who can scale very quickly, and very cheaply. There are therefore clear threats for large companies, not only from startups, but also from new entrants from other industries. But banks still have very strong assets, from a very large customer base to a wealth of services, from the regulatory infrastructure to the strong financial resources. There are a lot of different ways for banks to do their digital transformation, but the key in my opinion is to have a very clear and defined strategy and realise that standing still is not an option.