Excellent read about the current situation and the inevitable move of banks from managing clients and their money to the new paradigm of creating value out of client information and client relationships to finance. Chris Skinner presents the inevitable change as a continuum extending from now into the next decade and he provides real examples to support this set of changes. He also describes the upcoming payment alternatives including Bitcoin and virtual currencies and the possible impacts on the future of Banking. Banks, unlike other industries, are yet to either embrace, or be disrupted by, the new service and business models made possible by the convergence of internet, unlimited bandwidth, and smartphone/ tablet power and form factors. Banks will have to change their 30 year old business models, , branch networks, ways of working and the respective technical systems in order to survive in this new Internet connected world by, to a large extent, completely re-inventing themselves and their relationships to "clients". Quite simply..... the power of Bank over Client will be replaced by the power of Client over Bank. Banks will need to work harder and more smartly to make their profits and retain their clients.
Why do Banks need to become more digital? As an example of today. My Bank takes my monthly salary and income electronically, allows me to withdraw cash, gives me a debit/credit card card and charges me for services but pays nearly no interest on my money. They enable me to do e-banking so that I can independently manage my payment, standing order, payments etc and although I am rather solvent, they still think it is sensible for them to call me or post me information to take expensive personal loans every single month. Do they actually care about me .... the "client", my family, my status, my interests or my intended future? I would say unconditionally "NO". And they do not realise that I have not visited one of their many branches in over 10 years.
As I get wealthier, they offer me more expensive services, platinum cards, ideas for opera tickets, symphony orchestra concerts, and high end holidays in far-flung places. I intensely dislike opera, and symphony orchestras, yet the Bank feels that it should offer me these most costly services and ideas. Once again, the Bank appears to care more about their short term income than my actual needs and requirements.
In summary, the future belongs to banks who offer superior services, individualized information on multiple platforms and formats 24/7 and absolutely geared to peoples lives and at zero cost.
If you're downloading Digital Bank to your Kindle, then you're probably likely to agree with Chris' call to arms for the banking industry to embrace its digital future. What does the future hold for existing banks - can they transform their operations and relationships to compete successfully against digital newcomers? Will legacy bank customers trust them with their data and permissions, given the lack of confidence and trust in banks and bankers, and the search for a new banking? Digital Bank brings these, and many other dilemmas out into the open.
One of the greatest strengths of the book is the wealth of examples and case studies from around the world, showing just how much of the future is already here, now. A very useful resource for bankers, would-be bankers and business students alike.