Why traditional banks must innovate and transform to survive

Commentary by Peter Veash | Finance MonthlyPublished 2 Min Read

Digital transformation is already happening and high street banks need to play catch-up. That’s the situation in financial services according to BIO CEO Peter Veash.

And although he doesn’t mention the m-word (millennial), it’s clear that younger customers are driving the need to transform. 

Customers now have diverse needs. They are used to transacting online and can’t understand why you wouldn’t do it all via smartphone. They don’t understand why you won’t give them the credit card you’ve been trying to promote in their social channels. They know you have their data and are baffled why you’re not using it properly. Peter Veash

By contrast he sees high street banks as still keeping to traditional modes of business “largely set up to cater to that customer who joins as a teen or young adult, visits the branch infrequently to pay in a cheque or withdraw some cash and on occasion might nervously make an appointment to arrange a mortgage.”

However he sees a plethora of new, more flexible choices offered by digital disruptors, who may operate purely online or have limited services – issues that may be of increasingly limited importance to today’s audience.

It’s not all bad news for the legacy brands though. “Legacy brands have a lot going for them. They remain large, national and even international institutions. They are able to deliver a wide range of products and services that are trusted and competitive… For most legacy brands therefore, the building blocks of their response to digital transformation are there."

Mentioning new innovations planned by Lloyds Bank and digital disruptor Atom, he advises that traditional banks need to be able to ‘bolt on’ innovations while they work on the larger, longer process of digital transformation. “Whether creating disruption task forces internally to brainstorm solutions, or buying in consulting expertise, or even startups themselves to become the fast-response arm of the existing business, each legacy business will have to decide for themselves.”

He ends with a stark warning: “What these large heritage institutions do next will determine whether they survive this next wave of innovation by fintech players such as Atom and Monzo, or whether they become relics of an antiquated past.”

These topics and more are discussed in BIO’s White Paper The future retail bank: evolving at speed in a digital world.

Is this the end of the bank branch? Read this article on our blog to find out.

 

 

 

 

 

 

 

 

    Peter Veash | CEOShare article |
    Peter Veash | CEOShare article |
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