Brett King: High Street Banking is Ending…

Brett King, best-selling author of BANK 2.0,and BANK 3.0, remarks that high street banking is ending…

By 2016 by far the most common interaction that most people will have with their bank will be through their smartphone

The reason, mainly is the rapid adoption of technology by common people:

While the telephone took approximately 50 years to reach critical mass, television took just half that (about 23-25 years).  Mobile phones and PCs took about 12-14 years (half again), and then the internet took just seven years (half again).  New technologies and initiatives such as the iPod and Facebook are now being adopted by consumers en masse in timescales that are now measured in months, not years.  Apple sold more mobile devices in 2011 alone than all the Mac computers it had ever sold in the 28 years prior.

…… in this year, the average time spent daily using mobile phone apps surpassed the time people spent surfing the web on their PC.

What about banking?

In Britain, only 30% of people regularly use a branch, and half of this group are small businesses that are still reliant on cash.

With new mobile payments services such as Square (in the US) and the Swedish firm iZettle coming thick and fast, how long will this status quo last?

Even if current trends don’t accelerate at all, by 2016 by far the most common interaction that most people will have with their bank will be through their smartphone.

Banking through our desktop computers, or telephones, will still play a major role.

But, in the era of big data and exponential technological progress, can there really still be a role for the 1472 model of banking?

Banks insist that face-to-face advice is still the reason people visit branches.

But the truth is that, with current account margins so razor thin, there is little or no incentive for banks to spend money giving people advice that keeps them out of debt.

Already major payments providers like Visa are pushing Near Field Communications (NFC) payment solutions hard – a raft of contactless payment systems is beginning to hit the market.

…… I believe this new kind of technology will pave the way for a new kind of financial advice.

Instead of visiting a branch once every year, spending advice can be pushed through to the payment device itself.

Rather than a “once-a-year financial health checkup”, it’s far more powerful to tell a customer, as they’re about to buy something, what percentage of their monthly income is represented by what they are about to spend their money on.

Most of all, however, the successful banks will be those that become great service organisations.

 

Full article by Brett King @ BBC here: http://www.bbc.co.uk/news/business-20415544

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