My colleague at Cognizant, Peter Abatan, is both a banking expert and a mobile technologies expert. Recently Peter has been sharing his thoughts with me on the topic of how SMAC (social, mobile analytics and cloud) trends are impacting the banking industry. Here are some excerpts from our exchanges:
- Bank branches are predicted to see diminishing foot traffic (visits per branch) at a rate of 8-10% each year for the next 8 years. People are using mobile apps in increasing numbers rather than visiting branches for routine banking tasks.
- Given the popularity of mobile banking apps, the banks with the smartest and most responsive mobile banking infrastructure will have a competitive advantage.
- If banks do not quickly evolve and educate their customer base on the advantages of mobile banking and digital transformation, other competing banks will, and they will use it to their advantage.
- Traditional banks are feeling an increasing pressure to transform because their current size, structure and legacy IT environments prevent them from adapting rapidly enough to meet new challenges and to address the changing behaviors in the marketplace. Many banks will become smaller and more nimble as a result of these pressures.
- Social media impacts the way banks sell and market their products. People talk about their banks, the service levels they receive and the price of service fees. If a bank tries to sell a customer the wrong product, provide poor service or charge a higher than appropriate service fee, then the customer’s network of contacts will learn about it quickly.
- Crowd-funding platforms like Crowdcube and KickStarter are offering higher returns on investments than traditional banks. This is an emerging threat to traditional banks. These crowd-funding platforms have far lower cost structures to maintain than a traditional bank with branches and labor intensive sales and marketing channels.
Read Part 2 of this article series here.
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Kevin Benedict,
Head Analyst for Social, Mobile, Analytics and Cloud (SMAC)
Cognizant
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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and SMAC analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
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