Many consultants and analysts have been critical of major retail banks’ performance during the digital revolution.
Super App and Digital Platforms could save high street banks
Noting the rise of “digital native” banks built for mobile and internet banking, analysts have predicted that as many as a third of today’s retail banks could be merged out of existence by 2030[1].
As things stand, the number of bank branches in Europe has halved in the last ten years, and continues to decrease by around 10,000 every year[2].
In our new white paper, we acknowledge the transformative effects that mobile technologies have had on banking.
However, we argue that there’s still time for today’s major retail banks to deliver effective mobile and internet banking services that capitalise on their strong customer relationships and the high degree of trust they enjoy with customers compared to digital-first competitors.
The old ways don’t work
Traditional banks struggle with tangled webs of legacy platforms, from outdated platforms focused on card-centric e-commerce systems to internet banking systems that pre-date smartphones and apps.
As tech innovation races ahead, these legacy platforms are becoming increasingly redundant.
Banks find it harder to justify the spiralling cost of maintenance and updates, as well as disjointed data silos that cannot provide a full picture of customer behaviour.
In a last-ditch effort to keep up, many traditional banks have launched technology innovation labs.
While this might sound edgy and exciting, such innovation labs often fail to consider bank IT at a systemic level, leading to a mass of disjointed services and fringe propositions as new and traditional services are patched together.
Banks that are both issuers and acquirers face bigger problems, as consumers prefer to pay at merchants and retailers using a single low-friction mobile app.
Consumers have no understanding of the ways banks divide their business, and are left with too many different apps and no genuine omni-channel experience if banks choose to separate the consumer-facing elements of their issuing and acquiring businesses.
As we argue in our white paper, the way forward for traditional high-street banks is unify their services through a strong digital platform and a “super app”, similar to those experiencing great success in Asia and elsewhere such as AliPay and WeChat.
Doing so will enable traditional banks to create an omni-channel customer experience while providing the bank with a single view of their operations and customer data.
For those offering both issuing and acquiring services, a super app powered by a great technology platform provides the opportunity to sit at the heart of the payments ecosystem.
Investing in a great technology stack will help create a single platform not just for mobile banking and payments, but for all digital services, and will propel high-street banks to a business model that doesn’t rely on legacy systems for success.
To find out more about how super apps and digital platforms can power great banking performance, download our white paper HERE.
[1] See Gartner, “Most Banks Will Be Irrelevant by 2030.” https://www.finextra.com/newsarticle/32860/most-banks-will-be-made-irrelevant-by-2030—gartner
[2] www.paymentyearbooks.com
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