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Imagine and Challenge the Idea of Future Bank6 min read

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Posted date December 4, 2018

This article is a submission for the Techsaucier of the Year 2018, written by Viphanee Vachirasrisoontree.

This article is mainly challenging the idea of Future bank. Because, why not ?

…the future is simply the set of all moments yet to come. But what makes the future distinctive and important isn’t that it hasn’t happened yet, but rather that it will be a time when the world looks different from today

— Zero to One, Peter Thiel

Earlier this year….banks’ transaction fees were wiped out. It was a phenomenon that bring surprises and worries to the industry.

Earlier this year….there are upheaval upgrades on everyone mobile banking.

Earlier this year…. banks started to offer self-service for opening a saving account and applying for a digital loan.

Wasn’t it quite obvious ? Anyone could foresee that coming ? It took just one drop and everything else sounded like a ripple.

Well.. If it wasn’t obvious back then, may be we need to start wipe off the fog on our glasses and start looking forward. What do you see ?

What does the Bank of the Future look like then ?

For centuries, banks have always been the big fat cat enjoy being a middle man in financial services be it loans, payments, savings. No one could do what bank does. It was a ‘Bank Era’. Well…. It was a bygone. Welcome to the ‘Bankless Era of 21st century’ The Era in which everyone has a chance at financial services

1. How about ‘Bank of Amazon’ ?

If given a chance to take a piece of cake, who wouldn’t take one ?

Source: CB Insights

Amazon, one of the largest e-commerce in the U.S., already offers a wide range of financial services such as payments, lending, insurance. The e-commerce giant started to leap across industry into financial service and has been carefully watched in the top ten emerging trends in financial sector as the idea of “Bank of Amazon” emerges.

Amazon had started offering Microfinance to selected seller and buyer on specific product on its marketplace. For independent sellers who pay Amazon to deliver their product to customers, Amazon has an automated loan payment deduction from the seller’s account every two weeks. If the seller fails to make the payment, Amazon can freeze the seller’s merchandise on its warehouses. Also, Amazon has an eye over the seller’s cash flow data as the selling happens on their platform. Overall, it seems like a win game for amazon but probably not a satisfying one for bank as their customers were taken.

Who needs bank loan anyway if it was easier and more convenient through the platform that you are already on.

Although e-commerce in Thailand is still unsettle in a red ocean, no one could deny that it is growing at a fascinating rate. Once everything is set and sound. What would stop them from offering some financial services like Amazon does?

2. No such thing as ‘Channel’

Digital is not just a channel. Online is not a channel.

Source: tubular insights

We all have heard of ‘Digital Natives’, the people who are born and grow up in the Digital era. Yet, as time passes, there will be no such thing as Digital anymore. It will become a new way of life. Therefore, we should not use or think of ‘Digital’ as a separated thing. Digital bank sounds like a trend. Soon it will be just bank as the word digital merges in. Just like no one call analog TV ‘analog’. We call it TV.

What is the implication in all of this ?

Digital banking is not a channel. Online banking is also not one too. Like it or not, they are the way things work now and they are here to stay. Customer doesn’t separates ‘digital banking’ from a brick-and-mortar bank. Banking is banking whether digital or online. The core service is same.

People doesn’t think of mobile banking as ‘Mobile’ banking. It is the same old banking service with a new way of doing. For example, transferring money through mobile has become a default not a choice. People don’t choose to transfer via mobile. They just do it because it is how thing work.

Interesting Case Studies here

First direct, an innovative phone banking, is a good example of the new era bank. It has no branch no different channel for different this and that. People can do a complete service online or equally through a phone call. Online banking for them is bank. Digital banking is just banking with digital at its core not as a channel.

Although we have see many banks in Thailand have been trying to move forward with Digital Transformation this year, it is still slow. Thanks to the long-held oligopoly status heavily regulated by Bank of Thailand, Banks are used to low incentive to change and move. But that won’t be too long. As we have already seen, a drop in the ocean can now trigger many things.

We all know that the tech world where we live is fast and ruthless.

3. A Just-For-You bank

What if…. the minute, you walk into a car dealer, there comes a notification.

‘Hi, … We’ve got a special auto loan deal just for you’

Creepy but amazing right ?

This is the real thing of NOW. We couldn’t have done it in the past. It is the thing that signifies present and the possibility of the future. It is data integrated with the geolocation tech. It is already here being used in retail and tech companies. We are all have heard of the cliche ‘data is the new oil’. Gigantic techs like Amazon, Facebook, and Google are not admired for retail, books, or search. In fact, it is brilliant data management. We are drowning in the world of big data. The fact that the volume of internet traffic has been doubled every year is not something that should be ignored.

Banks must utilize data to unlock its capability to be predictive and to offer digital augmented services that satisfy people’s lives. Banks should be able to foresee a customer financial needs and to make an offer ahead of time.

What if … A bank can analyze the purchases that indicate frequent visits at Mother care store where the client has never gone to predict the promising arrival of a baby. Accordingly, the bank provides products that are personalized to the client and her baby, says, a future education saving account or a loan for maternal care. Though accurate data analysis, this contextual service is possible and have already been used in some business like Google. Now, it is times for bank to be more daring and more experimental.

Sources :

CB insights

first direct

Skinner, C. (2014). Digital bank strategies to succeed as a digital bank. Singapore: Marshall Cavendish.

This is a guest post by Viphanee Vachirasrisoontree.

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