Banking is undergoing a sea change, even though it is occurring as a series of ever-strengthening waves rather than one catastrophic typhoon. But rest assured, the end result will be the same: a new way of banking as we move through the second decade of the 21st century.
Among the latest reports to lend credibility to this change is "The New Digital Tipping Point," released by the U.K. research firm, PwC. According to the report, customers want innovative digital services, such as social media notifications, e-wallet loyalty cards and personal financial management tools. They want more robust banking services on more devices. Yes, says PwC, we are nearing the digital tipping point.
And, lest I forget perhaps the most important finding in the report, customers are willing to pay money for these services: $6 a month for a loyalty card and up to $15 a month for a full slate of digital services. Unfortunately, but not too surprisingly, banks are slow to take advantage of this new opportunity.
“Banks have generally been slow to embrace the digital innovation customers now expect from other industries, such as retail or travel," said Stephen Whitehouse, retail and commercial banking partner at PwC.. "This needs to improve if banks are to hold on to their existing customers and attract the next generation, as the quality of a bank’s digital offering will become an increasingly important factor for consumers.
“Despite customers’ appetite for new and innovative digital banking offerings," Whitehouse continued, "and the fact they are willing to pay for these, the majority of banks still only provide basic mobile and Internet banking services. Banks are clearly missing a trick if they don’t start to invest in their digital offerings and only see digital as a way to reduce costs.”The lack of investment is perhaps even more surprising considering banks are struggling to grow revenues at a time of increased regulation and a difficult economic environment. Digital products are a significant opportunity for banks to grow revenues and serve their customers in a way that they want.”
And where do we go from here? I hope to a new era of new-found revenue for the banking industry.