Is Your Institution Ready for the Revolution in the Payments World?
Originally published in the December 2014 issue of Transaction News Volume 14, Issue 12
Bluepoint Solutions’ CMO Andrew Tilbury shares the results of his latest research with a discussion of the key challenges facing financial institutions today. Drawing on data from multiple sources, he discusses the potential defenses for banks and credit unions against new competitors entering payments and banking.
Q: What do you think the biggest challenge will be for banks and credit unions in 2015?
Tilbury: The banking industry is in the midst of a revolution that threatens the future of traditional finan-cial institutions. This threat does not come from the usual competitors – namely, other banks; it comes from new categories of firms that have historically stayed out of the payments and banking industries, but are now using recent technology innovations and shifting consumer preferences to challenge traditional players in their core lines of business.
At the heart of this challenge sits the Millennial generation, demanding the delivery of banking services in novel ways. The war to win the Millennials is in full swing, but many financial services executives are un-aware how much it has progressed and aren’t sure how to compete, let alone how to win.
Q: If this competition is coming from outside the in-dustry, where is it originating?
Tilbury: Technology, Retail, and Telecom firms are all entering the banking and payments world with innovative products, respected brands, and massive customer bases. They have developed critical capabilities to deliver superior user experiences bundled with greater security, enhanced convenience, and expanded features that the majority of traditional financial institutions can’t hope to replicate. Most financial institutions are playing catch-up and are trying to maintain their relevance by partnering with these innovators, but they need to quickly shift gears to become innovators themselves. Otherwise, the disruption of their traditional business models will continue and banks and credit unions will lose the fight for Millennials, and with them an entire generation of future growth.
Q: How worried should banks and credit unions be about non-bank companies stealing their customer base?
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