Financial services institutions are facing pressure both from the increasing use of digital technologies and changes in customer behaviour and expectations. New entrants, previously considered as ‘small’ and not an imminent threat, are now growing at an exponential pace. Established players, such as Amazon, Google, Facebook and PayPal, are now also seen as a potential threat.
We are perhaps nearing a tipping point, with activities in branches reducing and mobile and online banking operations multiplying, along with the continuing explosion of interest in social media. There is a wealth of customer information held by banks, and there are many initiatives for packaging, analysing and using this ‘big data’. Banks need to be aware of the challenges ahead and must be ready to embrace them. Innovation will play a pivotal role in this.