Chris Skinner believes that if traditional banks do not change to capture the Market of One, new, more agile banks will fill the gap in the market – and that this is already happening.
Listen to him discuss the bank of 2020, and the power of one, with Michael Mischker of SAP.
Chris Skinner, Founder and Chairman of the Financial Services Club and a well-known banking blogger and commentator, called on the International SAP Conference for Banking to focus on two numbers with huge implications for modern banking – one and 2020. The bank of 2020, he argued, will also be the Bank of One.
One person has always had the power to change the world – but in a highly social, highly networked world, that one person no longer needs to be a President or a Nobel Laureate.
Molly Katchpole was a just 22-year old college graduate working two jobs to make ends meet. When Bank of America announced that they would introduce a $5 monthly fee on debit cards, she began an online protest. Hundreds of thousands signed up, many saying that they would close their accounts if the fee structure was not reorganised. This $5 fee led to a 20% increase in account closures before it was scrapped.
Katchpole was one person taking a stand through social media, and changing the policy at one of America’s largest banks. Currently, social media is leveraging banking. To remain relevant, banks have to start leveraging social media – and much more.
So, the bank of 2020 will need to be social – like Íslandsbanki, which connects customer accounts to Facebook identities.
It will need to be peer-to-peer – like Zopa, which connects individuals with surplus cash to those who need capital, and now represents around 2% of personal loans in the UK.
It will need to be mobile: in 2011 PayPal processed $118 billion in transactions. Only $4 billion was mobile – but in 2009 that figure was $140 million. Square, an application allowing iPhones and iPads to process credit card payments, did not even exist in 2009. In October 2011, one million merchants in the US – one in every eight – were using Square.
The bank of 2020 will need to understand a world of rapid social change, of micropayments, automatically processed through connected devices, and of customers who use those same devices to communicate with, transact with and sometimes organise protests against their bank.
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