Real-Time Person-To-Person Payments Are On The Rise In The U.S. — Aité
It might not look like it, but Americans are moving to real-time person-to-person #payments, largely from their mobile phones.
Financial Technology
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Phishing Attacks Continue to Rise as Malware Moves from Attachments to URLs
The sophistication of cyber #attacks on financial services continues to evolve, yet instances of long-established tactics like email #phishing and #malware attacks persist. A July 2018 study conducted by Proofpoint, a Sunnyvale, Calif.-based cybersecurity software company, found that email is the “most frequent source of advanced attacks.” But the attack vector has shifted slightly. #From […]
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Insuretech Investment On the Rise
Within the #fintech landscape, is insuretech becoming the popular choice for investors? According to a Medici report, #investment in insuretech, which it recognizes as a subcategory of fintech, was higher than investment in #blockchain and B2B during the month of May. Fintech investment trends broken down by industry indicate a clear surge in insuretech investment. […]
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Wells Fargo to Shut Down More Branches With Rise of Digital Adoption
EXCLUSIVE – #Wells #Fargo plans to #shut #down 300 #branches this year and about 5,000 branches by 2020, as the bank sees a surge in #digital adaption from its customers, CEO Tim Sloan said on today’s earnings call. San Francisco-based Wells Fargo saw a 13% increase year over year increase in its customers’ digital usage […]
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The rise of the challenger bank
In my first blog for Accenture, I discussed some of the large-scale changes facing the banking industry in Europe. One of the biggest of these is the rapidly evolving nature of the competitive threat that European #banks face. Overseas banks are receding in importance, as non-European banks have tended to refocus on their core markets and redefine their core businesses. Traditional banking competitors remain a factor, but the biggest emerging threat for European banks is from so-called “#challenger banks.”
In a survey co-sponsored by Accenture and Temenos, more #bank respondents (22%) cited challenger banks—loosely defined as banks based on digital delivery channels with a focus on improving the customer experience—as the top competitive threat, outpacing #technology vendors (20%), existing large incumbents (20%) and #fintech start-ups (16%). What’s more, the perceived threat from challenger banks has been growing, with 11% of respondents citing challenger banks as the top threat in 2015 and 16% in 2016.
Challenger banks have many of the advantages of traditional banks, including the right to undertake activities that require a banking license and the consumer trust that derives from being a regulated institution. But, they tend to be more focused on the customer journey, and by operating without cumbersome legacy IT systems or the “brick and mortar” infrastructure that drives up incumbent banks’ costs, challenger banks can compete effectively while offering a customer experience based on digital innovation.
Some banks are responding by offering their own challenger brands—such as Leumi with Pepper and BNP Paribas with Hello. These entities are, in effect, parallel universes for legacy banks. If they are successful in establishing a digital framework with a lower cost structure and an attractive customer proposition, they may be able to move their own customer base to the new entity over time or generate new clients through that channel. In the meantime, however, the legacy banks are running parallel institutions, dividing their time and attention, and adding cost and complexity.
Challenger banks have also found that the banking industry is not as easy for new entrants as they might have thought. The Financial Times has reported that capital demands for challenger banks are higher than anticipated and that the competitive marketplace is pushing UK challenger banks to offer riskier loans at low rates. As some of these challenger banks come from outside the industry—from areas such as telecommunications and retail—those constraints might prove a difficult hurdle to overcome.
The environment remains incredibly dynamic: Some banks buy challengers banks outright; others partner with them to offer new services; and still others team up with fintech providers to create new offerings. The introduction of Open Banking is another factor that will reshuffle the cards, providing new opportunities for start-ups and for alliances between innovators and established players. In my next blog, I will look in more detail at how established European banks are approaching digital transformation in this changing landscape.
The post The rise of the challenger bank appeared first on Accenture Banking Blog.
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The rise of the challenger bank
In my first blog for Accenture, I discussed some of the large-scale changes facing the banking industry in Europe. One of the biggest of these is the rapidly evolving nature of the competitive threat that European #banks face. Overseas banks are receding in importance, as non-European banks have tended to refocus on their core markets and redefine their core businesses. Traditional banking competitors remain a factor, but the biggest emerging threat for European banks is from so-called “#challenger banks.”
In a survey co-sponsored by Accenture and Temenos, more #bank respondents (22%) cited challenger banks—loosely defined as banks based on digital delivery channels with a focus on improving the customer experience—as the top competitive threat, outpacing #technology vendors (20%), existing large incumbents (20%) and #fintech start-ups (16%). What’s more, the perceived threat from challenger banks has been growing, with 11% of respondents citing challenger banks as the top threat in 2015 and 16% in 2016.
Challenger banks have many of the advantages of traditional banks, including the right to undertake activities that require a banking license and the consumer trust that derives from being a regulated institution. But, they tend to be more focused on the customer journey, and by operating without cumbersome legacy IT systems or the “brick and mortar” infrastructure that drives up incumbent banks’ costs, challenger banks can compete effectively while offering a customer experience based on digital innovation.
Some banks are responding by offering their own challenger brands—such as Leumi with Pepper and BNP Paribas with Hello. These entities are, in effect, parallel universes for legacy banks. If they are successful in establishing a digital framework with a lower cost structure and an attractive customer proposition, they may be able to move their own customer base to the new entity over time or generate new clients through that channel. In the meantime, however, the legacy banks are running parallel institutions, dividing their time and attention, and adding cost and complexity.
Challenger banks have also found that the banking industry is not as easy for new entrants as they might have thought. The Financial Times has reported that capital demands for challenger banks are higher than anticipated and that the competitive marketplace is pushing UK challenger banks to offer riskier loans at low rates. As some of these challenger banks come from outside the industry—from areas such as telecommunications and retail—those constraints might prove a difficult hurdle to overcome.
The environment remains incredibly dynamic: Some banks buy challengers banks outright; others partner with them to offer new services; and still others team up with fintech providers to create new offerings. The introduction of Open Banking is another factor that will reshuffle the cards, providing new opportunities for start-ups and for alliances between innovators and established players. In my next blog, I will look in more detail at how established European banks are approaching digital transformation in this changing landscape.
The post The rise of the challenger bank appeared first on Accenture Banking Blog.
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Will Bitcoin’s Price Rise Turn the Currency Into a Mainstream Investment Tool?
EXCLUSIVE— With #bitcoin’s #price over $ 15,000, and continuing to #rise, it seems as though the #currency has finally hit its #mainstream moment. The currency’s price has more than doubled since the beginning of the year, and much of that spike has occurred just within the past couple of weeks. It has not gone unnoticed by […]
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The Rise of Alternative Data in the Lending Market
EXCLUSIVE – There were conflicting views on the importance of the FICO score at the PayThink Conference in Phoenix this week. While only some professionals were bold enough to say the standardized credit scoring has become marginalized, others maintained that it was here to stay. However, all agreed on the increasing potential of #alternative #data. For […]
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Rise of APIs – Payments and Other Financial APIs See Huge Growth Spike
#APIs, or Application Programming Interface, have seen tremendous #growth, especially in the finance space. The #spike in numbers comes as no surprise with the ever-increasing number of #fintech startups as well as traditional #banks and #financial institutions rushing to integrate APIs in some form or the other. Other factors contributing to this growth, according to […]
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The Rise of ‘Smart’ Authentication [SPONSORED]
It’s the 21st century marketing mantra: Never underestimate the power of ‘#smart.’ We have ‘smart’ phones, ‘smart TVs’, a ‘smart’ doorbell and yes, even a ‘smart’ dishwasher. What about ‘smart’ #authentication? Multifactor authentication strategies, while rising in popularity continue to be dogged by the tradeoff of usability and security. In other words, if authentication solutions […]
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