The digital revolution is playing an increasingly larger and more dominant role in how we live, work, conduct business and relate to others. Four primary drivers are acting as enablers: big data, expansive mobility, social media and cloud computing. The convergence of these forces is creating new businesses and reshaping existing ones that must all adapt to ever-changing customer behaviors. It’s also helping a wide variety of industries create rapid innovation and new opportunities for monetization of data.
Traditional banks are facing fierce competition from digital banks and fintechs that are providing new, extended or enhanced financial products and services such as efficient online payment services or peer-to-peer lending sites. These emerging entrants into the marketplace are often more agile and innovative than traditional banks, have a deep knowledge of how customers think and might even have established a good reputation. In addition, many do not face the growing regulatory pressures which traditional banks must cope with.
Successfully competing against these entities—whether long established competitors, digital giants or born in the cloud startups—requires immediate and decisive actions to meet an evolving set of challenges. It also necessitates new thinking, new business models, and more rapid and effective application of evolving digital technologies. This paper explores some of the initiatives financial institutions must embrace to successfully adapt and transform into a thriving, profitable next-generation bank.