Today’s banking is undergoing a transformation so rapid, that most players still lack to see the full potential impact from this disruption taking place! And to spice that up even more, the threat or as I tend to call it – the opportunities are coming from various angles….
Deep down banking, or rather transaction management, is driven by a few and important statements around:
- a secure environment
- a high level of trust
- a known set of regulations are in place
- long term customer relationships is custom
… and still today, a high level of face-to-face interaction to enhance most of the above mentioned is preferred by a majority of customers.
What drives user adoption forward?
Combining the above core needs with todays market place, the traditional view on banking is rapidly upgraded by the users for several good reasons. Which location, organization or even brand could take the lead on meeting the basic needs of transaction management? From what angle is the challenger coming from? A local or global player? As an example, Facebook released their latest version of Messenger this week in the US. Even with only a regional roll out in the US and Canada area, that suddenly enables 159 million daily active Facebook users to initiate a seamless peer to peer transaction, using the Messenger platform (which they already have a preference for, when potentially making calls, sending texts, etc.)
Another important issue when talking #FinTech etc. is to define what kind of banking we are talking about? In reality, several layers of “banking” are to be challenged going forward.
- Peer to Peer payments
- Online shopping
- Retirement funds
- Major life investments
Most Venture Capital companies in the Valley have their eyes on this industry, since ruling this space, means changing the game. One of the most recent articles I find really interesting and with a great overview of the market is from CB Insights
The world of personal finance is getting more personal
It is becoming evident that personal finance matters more in recent years, than ever before. A trend towards more personal transparency and data driven insight to your personal finances is clearly emerging as we speak. The smartphone and the related app world has had a major influence, and next up are areas like personal wearables etc. A company like Moven has introduced a “fitness tracker for your financial health” introducing a personalized and gamified world around tracking your expenses and link them to your own personal goals in life. A user scenario could be: I wanna travel to Rome in the fall of 2015, and I know the cost for that. If I keep up the current consumption of Cafe Lattes from Starbucks, Moven spending tracker will tell me by how much I will postpone this trip. As one out of many, the Moven app also resides in the latest Android wearable watches from Google and Motorola. Not a wallet, not a phone….but a personal financial companion around your wrist. We are only getting started, and a lot of research and development is put into this area, also in Silicon Valley.
Denmark, Silicon Valley and the rest of the world
In Denmark we have experienced a major impact from players like Danske Bank with MobilePay as well as the other banks with Swipp. What happened when easy to use services were introduced to the Danish market – we had a huge user adoption from day one, and it seems like sky is the limit. But where to go from here…..what is coming up next? It is always easy, for some of us, to be inspired by what technology might bring into the game, and from that angle alone, a lot is happening. Some of the latest in Silicon Valley is the strong focus on Hardware as well as Software. The focus of making a transition paper to paperless and to make the customer experience journey the best ever, simultaneously! Apple Pay has made the life easier for some, Facebook Messenger might be the solution for some and on top of that add PayPal, VISA, MasterCard and the 100’s of startups finding new ways to solve some of our daily challenges.
As a local in both Silicon Valley and Denmark, I tend to see some of the most important benefits as being; continuous innovation, curiosity, knowledge sharing and creating strategic partnerships. Given todays pace of innovation in the #FinTech world, no one has the time to invent everything yourself. The true competitive edge comes from staying on top of the both trends, major players as well as knowing where to look for up and coming startups which all bring major value into this space, every day.