Banking is Evolving, and It’s time for Banks to challenge everything.
As challenger banks and big techs erode the value chain, the banking sector has been fragmenting.
Although this “neo-normal” has provided some opportunities for cooperation, it has also given banks a clear choice: continue to invest in technological innovation or risk losing their ability to compete.
However, this goes beyond only digital change. We think the time has come for banks to question their ingrained norms and beliefs since market share and revenue are migrating from the banking industry to other industries, particularly big tech. They must have a thorough understanding of their markets and what it takes to thrive in each one if they are to maintain their relevance. They will need to be prepared to create novel business models, collaborate in unorthodox ways, find their new purpose, and pledge to continuously innovate.
The current state
- After ten years of disruption in banking, a digital endgame is starting to take shape. The traditional and challenger industries will both have winners and losers.
- Profit compression, higher risk costs, and an accelerated digital transformation are levelling out banks’ competitiveness.
- As banking’s market share and revenue flow into other industries, especially major tech, another super-cycle is picking up speed.
- Ambient banking, which blurs industry distinctions and helps banking services disappear into the backdrop of our digital lives, is to blame for this.
Road to Success
Based on years of work with many of the most prosperous banks in the world, we have identified four imperatives that banks must meet if they are to succeed.
Recognize the particular dynamics of each market.
Banks must comprehend the distinctive characteristics of their marketplaces and concentrate on the particular qualities that will enable them to prosper if they are to draw investors.
Modify your business models.
Innovative banks will look beyond incremental advancements in their digital capabilities and explore the art of the feasible.
Develop a plan to benefit from the digital premium.
Recent studies have demonstrated how the use of excellent technology in conjunction with a compelling goal truly distinguishes top performance.
Put technology enablement first.
Given that there is a direct correlation between the adoption of new technologies and revenue growth, competing on tech architecture will be essential for creating value.
Leading banking institutions are valued at a higher premium than those that are lagging behind, and this difference is growing. Which companies emerge on the right side of this divide will depend on decisions made in the succeeding 18 to 24 months.
Indsafri is here to support you as a strategic partner, not as a vendor. Bringing technological know-how, a global vision, and the capacity to perform, while sharing the risks and profits. Using industry-leading tools and solutions, flexible architecture in the cloud is made possible. use technology to extract value from your data and produce outstanding customer experiences. Affirming our commitment to technology and human innovation while putting our reputation on the line next to yours.