julio 27, 2016 6:17 pm
It took computer company Apple only five years to become America’s largest music retailer, and just seven to become the world’s largest. In just 18 months, the launch of the Google Maps App wiped out 85% of the market capitalization of the GPS industry. There are more Uber cars active in New York at any time than Yellow Cabs.
Companies nowadays are venturing into other industries for growth with increasing regularity. This represents a major challenge to the banking sector where non-banks are taking advantage by proceeding aggressively with digital innovations and capturing more and more of the banking value chain.
Everyday worldwide consumers are using their phones to make payments. But unfortunately for banks, many of these payments are transacted through mobile apps controlled by online-payments specialists and digital merchants. Payments are key in the entire banking relationship, and this area is under attack.
And while some traditional banks are offering mobile payments solutions and reaching substantial new customer communities, it is nonbank attackers, from large telecommunications companies to small and agile technology players, that are defining the standards for digital banking. In addition, nonbank digital players enjoy some important advantages, including fewer regulatory constraints, a higher risk appetite, and greater tolerance from customers.
For now, the payments business remains within the core bank franchise, but attackers such as Google, Apple, and PayPal threaten critical sources of revenue. What if In the long term, Apple might decide to disintermediate the card networks or even the banks themselves? According to the 2015 annual trust barometer by Edelman, technology companies are the most trusted sector (78%) while banks the second-least trusted (53%), so combined with better user experience and lower cost Apple has a huge opportunity for disruption.
There is no question that bank disintermediation is a reality and is highly likely to accelerate. What’s more, this could have a major impact on the future of the banking sector, bigger than we think. Revenue opportunities in banking are linked to customer relationships and once visibility and control over these are forgone, income will take a dive.
For banks’ new competitors, particularly retailers, payments and other traditional banking facilities are more an inconvenience than they are business opportunities; their goal is to remove all points of ‘friction’ from the consumer’s mobile experience. It seems pretty obvious that they don’t just want to increase market share, they want to control it completely.
But banks too are fighting back with their own solutions. It is now down to each individual bank to decide whether it retains, reduces or expands its position in this market through partnerships (co-branded digital cash solutions), proprietary solutions or a combination of the two.