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Reality is, they are coming

This is a very interesting story and one that shows two things, that there is no choice for companies to continue to meet the mobile digital age requirements, otherwise someone else will. I also personally believe that Google , Apple, Paypal  etc will enter the banking and financial services space and will have far more streamlined models, that are not burdened by the high cost structures of branch networks and enormous staffing costs.

The reality is the very thing that is highlighted in the article below about regulatory and compliance issues is one of the very things that banks are also struggling with when one has to only read of the many cases over the past years of breaches by global players in this space.

To assume they would not like to or even consider the implications of the regulatory environment is also not correct in my view as given their power and monetary resources, the issues of addressing regulatory issues in each place of representation will not be an issue.

So the real challenge for all business models today is how to remain relevant in the face of the mobile digital giants entering their space now.

Please see article below;

Tips from the top: dealing with disrupters

by Marion Williams | Jun 03, 2014
St George Bank’s top banker reckons he knows how to stay ahead of the curve and protect the bank from the disrupters of the digital revolution like Apple, Google and PayPal.

The bank’s chief executive officer, George Frazis, believes that the world is in the midst of digital and mobility revolution that will transform most industries. If the industrial revolution is anything to go by, this digital and mobility revolution has only just begun.

“But things are moving very, very quickly,” Frazis said at a recent Trans-Tasman luncheon in Sydney.

“Customers will benefit from that but if you don’t deliver it, someone else will,” he said. It’s therefore essential that banks stay ahead of the curve because if they flounder it is very difficult to recover if a successful disrupter enters an industry.

For Frazis much of staying ahead of the curve means putting customers first to give them an exceptional level of service and experience.

However, he downplayed the likelihood of Google entering the banking industry per se because technology companies such as these aren’t used to a regulated environment. Frazis questioned how effective a Google or Apple would be in such a regulated environment and would they want to be in that?

Regulation is important, particularly in the payments system, “the backbone of the economy”. Nevertheless, banks can’t rely on regulation to protect them from disrupters.

The advantage disrupters have is they’re not saddled with the past. “They look at a customer’s pain points with fresh eyes.”

That’s why it is important for every banker to understand the experience of their customers and automate any unpleasant limits or eliminate them with digital and mobile.

Staying ahead of the curve

St George has a track record of innovation, being the first online Australian bank, and the second in the world. Being innovative is essential if you’re not one of the big banks, he said.

Frazis related its knack for innovation back to having a diverse workforce where everyone’s ideas are listened to. The bank selects its top 15 employees under the age of 30 to attend senior management meetings and contribute to strategy and innovation as they’re more likely to understand customers’ needs in the future.

Bold leadership is also essential to staying ahead of the curve. That means the ability to see around a number of corners, anticipate change, being comfortable with uncertainty, seeing opportunity where others see risk and of course having a good understanding of technology.

But banks shouldn’t lose sight of their main purpose. In St George’s case, that is helping retail customers to save, get into their homes and retire comfortably and supporting its small business customers to grow, prosper and contribute to their communities.

Mobility only

Frazis announced that from today the bank’s business model will be based on a philosophy of “Mobility Only”, namely everything from product design to customer service will be introduced as a mobile offering before being expanded to online and physical services.

It is currently trialling the use of Apple’s iBeacon in three branches. Through this the bank will know when a customer is in the branch so it can welcome the customer and invite the customer to meet with a manager or another specialist who will have the customer’s information on hand.

He noted few organisations know as much about an individual as a bank and Google is one of the best demonstrations of how much can be achieved with information by using data to improve the consumer experience.

Frazis was so impressed with Google Glass when he visited the company last year that St George is working with Google Glass to have a mobile banking application ready for when the glasses are available in Australia.

“In this day and age you have to be open to collaboration,” he said.

“If Google shares an interest in your industry I would be starting a ‘war room’ and diplomacy at the same time,” and before Google comes “I would be getting my house in order.”

 

Source: http://www.finsia.com/news/news-article/2014/06/02/tips-from-the-top-dealing-with-disrupters


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