Depending upon which bank executive you ask, they’re liable to give you different answers to the question “What is the major upcoming challenge for the banking industry?” Regulation, industry consolidation, shareholder pressure, blockchain, and cryptocurrency, the overall economy, all of those are perfectly valid concerns.
Digital-only banks and that’s a dangerous oversight.
Whether those stakeholders at traditional financial institutions are willing to readily admit it or not, there’s a legitimate threat to be acknowledged and strategized for.According to a PWC report presented in 2018, presently 46% of consumers prefer digital interactions with banks, almost double what reports claimed in the year 2012.
There’s no denying that the rise of FinTech startups and digital-only banking options have put pressure on traditional financial organizations to modernize and rethink the needs of their customers.
Here we have mentioned some of the key reasons why digital only banks pose an immediate threat to their traditional banks.They’re nimble and apply resources in the right placesDigital only banks are technology-first and mobile-first, so their R mindset and rate of producing new features and functionality for their customers are innately different.
Being mobile-first additionally provides the distinct advantage of built-in security mechanisms like two-factor authentication, encryption, biometric sensors, and even fraud detection through behavioral analysis.