Sunday, 17 December 2017

Information and commentary for the small business banking industry

One opinion on the future of banking

01 Jul

It seems to me that banks are increasingly in danger of being like the dinosaurs, who must have watched bemusedly as meteorites burnt through the atmosphere to destroy their world.

Bank meteorites include peer to peer lending, online access to finance, low customer loyalty, undifferentiated product, ponderous overheads and infrastructure, too many staff in non customer facing positions, and global unrest. Banks need to act now and use the current environment to stay ahead (or even level), before they get disrupted even faster than they are.

  • I would halve IT/web development teams and contract to third party providers everything that is non core such as website development (online banking may be core, but the actual website isn’t), product innovation, data management, hosting etc.
  • Put everything on the table to review. David Reilly from Bank of America said in a recent interview ‘you’ve got to retire the old stuff and get rid of the addressable expense’. I suggest make sure you don’t go down the same path and have 100 internal bank IT employees spend 2 years on the next system. I’d first try and license someone else’s.
  • Research banks worldwide and see if you can’t piggy back on someone else’s technology. You don’t need to own it. You need to own the customer.
  • I’d develop niche products or experts in certain industries and then widen your reach and target the whole country.
  • License other funding platforms that you can brand instead of developing your own. Boundaries are increasingly fluid.

Finally, if you detect dinosaur tendencies in those around you, then duck.


GSCirc

Glen Senior
Glen is the founder and CEO of The Small Business Company, a New Zealand based agency that specialises in helping banks communicate with small businesses through content marketing. He has written a number of books on small business principles and is a sought after consultant and conference presenter.

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