Last week, having updated its volume forecasts for the third time this year, Paypal predicted the end of the physical wallet, suggesting that within just 4 years digital currencies will overtake traditional payment methods, radically changing the way we buy and pay for goods and services.
Yet for every press release announcing that the future’s arrived, there’s another describing the slow uptake of mobile banking and asserting that UK customers still prefer to hear from financial services providers by post. It’s tempting for businesses to latch on to the latter as reasons not to change, excuses not to prepare their operating models for the technological transformation that is not just challenging the status quo of wealth management, but moving it on to a whole new playing field. But the reality is that change is indeed happening, and it’s happening faster than ever before.
Back in 1943 Thomas Walton, chairman of IBM spoke of a world market for “maybe 5 computers”. Thirty years later, his firm had invented the PC. 14 years after that, computers has turned mass market and now PCs themselves are under threat and IBM’s market capitalisation of $203.8bn has been dwarfed by Apple’s $309.2bn, driven from the design and sales of products unthinkable just 10 years ago.
In his book, Bank 2.0, a wake-up call to financial providers yet to embrace the digital age, Brett King points to these ever faster rates of adoption as an indication of just how quickly change now takes place.
The premise behind King’s book is that if asset managers, banks and other types of financial organisations don’t incorporate innovations into their customer experience at the same rate that customers are adopting them in the rest of their lives, they risk operating at a significant disadvantage, or potentially losing customers altogether as self-selection, execution only services and non-financial payment facilitators start to steal a march on traditional financial services providers.
Here are 4 key changes he sees coming soon to a financial organisation near you:
Gridless Customer Experience
- Valuable customers are increasingly mobile, demanding secure and instant banking and wealth management services.
- Technology will continue to evolve at breakneck speeds. Customers will expect their financial providers to keep up or lose their business.
Social networking and Web 2.0
- By 2020, all customers will have “grown up on social media” and be “digital natives”.
- Social networks will be more efficient and more trusted as providers of financial information and advice and will challenge the financial sector head on.
- The death of cash has been much heralded but slow to actually happen, yet the huge use of mobile payments in all corners of world, from Kenya and Brazil to China and Japan, means that the UK / US markets can ignore it for only so long.
- Personal and digital security will become a priority.
- TV advertising, outdoor billboards and direct mail campaigns are a dying breed. In future, consumers will view only the adverts they want to see, and read only information that is bespoke and relevant to them.
- Marketing will move from mass market to a “market of one” as customers demand an ever more personalised approach.
As Brett King points within the book, “The future, in many ways, has already begun. The only question remaining is how you will make the journey?
For more information on Brett King go to his blog or visit YouTube for a visual explanation of substance of his new book, Bank 2.0.