The future of the banking industry

Every month we see huge developments and changes happening in the banking industry. In September, IBM released research suggesting that 65% of banks have plans to put blockchain projects in production in three years’ time. Meanwhile the CMA recently released findings stating that banks are not working hard enough for their customers, and the BBC claims more than 600 High Street bank branches have closed in the UK in the past year. On top of this, traditional retail banks are facing increasing competition from digital-first challenger banks such as Monzo (formerly Mondo) and Atom.

The changes aren’t just coming from within the industry, but also from a huge shift in customer expectations. 51% of US adults bank online, as do 47% of Europeans, and this number is likely to increase as more Millennials buy in to financial services. This is part of a wider customer attitude that banks should be using the latest popular technology to provide the best service to their customers. However, with new expectations and technologies emerging all the time, how can the banking industry adapt to this digital world?

Notes from America

UK-based micropayments venture tibit (IBS Journal’s very first Startup of the Month) launched in the US last week at the Online News Association’s Denver event. Carl Beetham, Business Advisor, brings you this post from his travels

I’m the least-travelled of individuals and the daily commute to Peckham still fills me with an equal combination of trepidation and excitement. So you can only wonder at my feelings when faced with the joyous prospect of a business trip to the US – imagine a midget ginga Mickey Rooney-esque individual playing the Eddie Murphy character in Coming to America and you won’t go far wrong.

Gotta Catch ‘em All: Pokémon Go and the Banking Industry

If you had told us that you had never heard of Pokémon Go, especially after the month and a half the new application from Nintendo has had, we at IBS Journal wouldn’t believe you. The alternative reality game has had children and adults alike enraptured, following their phones around outside hoping to catch elusive Pokémon at local landmarks.

Explosive would be the right word to describe just how much of a phenomenon Pokémon Go has become overnight. Not only has it been downloaded in record numbers, but it is being used more often per day than the most popular apps of all time. The app almost has as many daily users as Twitter and the search term “Pokémon Go” and its derivatives have overtaken the most entrenched top Google searches, including those for pornography.

Beware of toxic unicorns

In the spirit of “coopetition,” High Street banks are cozying up to FinTech startups, but the prospect of partnering with a “toxic” one looms large. Rather than try to compete directly with disruptive startups, banks are making decisions whether to partner with, or even buy, these ventures that offer a quick way into true innovation, whether in payments, blockchain or lending.

No one doubts that FinTech, together with blockchain, is one of today’s hottest topics in financial services, with dozens of startups in London alone. Of those to make the FinTech50 list this year, 29 were in London. Most have been around for just two to five years. The lucky ones that reach the magic valuation of $1 billion are known as “unicorns.” Their products range from payments to mortgage lending to bond market social networking, and most have solid backing by venture capital. A staggering $13.8 billion in VC was invested in FinTechs last year, up from $6.7 billion in 2014, according to a report by KPMG and CB Insights.

BBVA: the FinTech poster child that thinks about the future

Another significant move by BBVA as it this week acquires Finnish online banking start-up Holvi. You have to hand it to the Spanish FI, when it comes to facing up to FinTech disruption, it is leaving many of its counterparts in the dust.

Three key steps banks must take to react to fintech innovation

As the technology available to consumers and businesses alike continues to evolve, it’s unsurprising to see the financial sector – one we all rely on throughout our lives – beginning to innovate alongside the rest of the business world. A major element of this is the growth of the fintech. This sector has grown rapidly; so much so that 35 per cent of the UK’s online population has used at least one fintech product.