Where do you see the transformation of banking and the way people do banking?
"The traditional banking model is under tremendous pressure – especially in the EU, with the banking landscape being flattened day by day. Traditional channels and products are less and less profitable. Bank branches aren’t able to bring to market the full range of financial products and services. Clients are starting to recognize banks by their smartphone apps rather than anything else. So yes, banks are facing a fundamental need for deep transformation. You also have new kids on the block. New types of players like Facebook, Google, and Apple are building their own financial solutions. Their tag line is: ‘Banking is essential; banks are not’. And these guys have obvious advantages in technology, not to mention a flexible business model. So banks have only one option – to develop effective remote banking as fast as possible."
So you see IT companies as a threat to banks?
"I don’t know if I’d go that far. But it is important to know your competition – and turn your enemies into partners. The IT giants are built on a culture of high-speed innovation. They have dynamic client platforms and make hundreds if not thousands of software adjustments every day. How many banks can say the same? This is unsettling, especially in a world where any customer can switch to another bank or app in an instant. Customers expect their bank to be accessible at all times, everywhere. They want transactions done online and in real-time. KPMG says that pockets of disruptive innovation are in image-based mobile banking, virtual customer support, and using targeted analytics instead of the traditional sales push. Banks don’t know what to do – but they need to innovate along these lines if they want to compete."
What is the biggest technological challenge the banks are facing?