10 years ago size and scale afforded retail banks a clear advantage over their competitors. Today banks which have long prioritised expansion over real transformation are starting to lose out to agile new competitors, such as Simple and Movenbank. “Banks that were ‘too big to fail’ are now too big to move and something needs to be done,” declared a recent opinion-piece from Bank Technology News
The article argues that major US banks are failing to keep up with the fast evolving needs of their customers, “they have become another manifestation of the ‘standing still is moving backward’ proverb that resulted in the demise of Kodak and Blockbuster.”
Conversely smaller banks are using their size to their advantage: Umpqua Bank, which employs less than 4000 employees, has altered its branch strategy, enabling it to build a new branch in 45 days (opposed to the 120 day industry standard.) Meanwhile, “U.S. Bank, at only 60,000 employees, has pioneered a number of payment and loyalty products over the past two years.”
Read the full article here
Very good points and well written…In India too, the private sector banks embraced technology quickly and was able to provide a formidable competition to the larger state run banks, so much so, that the bigger state run banks had to scamper for technological innovations to gain the lost ground….some are still lagging behind by a mile
At the end of the day, it is the customer who wins..
cheers,
Prijit