Recently we have seen the media devoting an increasing amount of press to the paradigm shift that is taking place in the banking industry in the digital age, as well as the new competitors who have entered into the financial market. Some of the data that may be surprising to us includes:
• Paypal has just introduced a new physical prepaid card designed to be used in stores. They are also developing a prepaid program that does not require users to have a bank account or go to a bank to sign up for the program.
• Google now allows users to send money through their email service (Gmail) and join their “crowdlending” service, where individuals are able to lend money through a platform.
• Amazon is becoming a bank for their financial distributors through their Amazon Lending Program.
Imagine if a company could send us message directly to our cell phone with a sale from a nearby store that allows us to purchase a product at the click of a button? We would only have to activate our GPS service, banking data and personal data and analyze what we discuss on social networks. Do you think this is far-fetched? The truth is that it’s not.
In this example, technology companies can become serious competitors to banks, especially if we also bear in mind that its primary segment are individuals and SMEs, which is the largest portion of the banking business that is carried out in Spain.
What are your differentiating strengths in respect to the Bank?
• They are leaders of innovation and have a good brand reputation (and even fans) enjoying the confidence of a high percentage of the population and new generations.
• They are adapting to the technological profile and to the demands of their users.
• They have large personal databases that allow a great opportunity for contact
• The presence that they have in networks and analysis technology allow them to do detailed marketing research to meet the needs and motivations of buying customers.
The Spanish Bank has jumped on the bandwagon and is leading a major transformation of its business models, adapting to the digital age and the new market circumstances:
• Focusing on a Customer Centric organization in a digital culture.
• Taking advantage of the value that digitalization offers in its offices and branches.
• Developing digital competency in their professionals in order to enhance and improve their customer relationships.
• Creating leaders capable of promoting a cultural change and putting into reality strategies to manage teams from newer generations.
• Having a greater presence in social networks and managing the customer knowledge that these networks provide.
For example, Caixa Bank currently is developing mobile platforms such as NFC payment options. Santander Bank already has a presence on social networks such as Facebook, Tuenti, Twitter, LinkedIn, Pinterest, Youtube and Google+, where they are able to have conversations with their customers and therefore achieve a larger coverage of personal contact. And BBVA has an Innovation Center that displays the sales and marketing opportunities that are offered through “Big Data and some key elements of the offices of the future”.
Therefore, the transformation of Banking has to be supported on the following fundamental pillars:
• The transformation of figures: CEOs + CIOs as creators of an ecosystem favorable to the construction of a good digital strategy.
• The integrated culture and technology transformation: touching on the organization’s cultural levers that allow the organization to take advantage of technology efficiently for the benefit of the business.
• The transformation of leaders and teams, by promoting 3 major changes:
• The employees.
• The leadership style, aligned with the new competencies of the twenty-first century leader.
• The coordination of the organizational structure.
The race towards a new way of developing the business of Banking in the digital age is already underway… What do you think will be the best way to lead it?