Group 8 – Banks in our Pocket : The new turn of the banks!

  • Banking innovation, services and new technology: how are modern banks attracting new customers?

According to the newspaper “Le Parisien” the Banks compete with new ideas and innovations in order to attract customers whose expectations have changed. (http://www.leparisien.fr/economie/business/banques-toutes-les-innovations-numeriques-16-02-2015-4538197.php).

Indeed, it is a brand new digital turning point that the banks decide to adopt.

There is no longer notion of liquidity. The money is now judged as obsolete.

All the heart of the financial world is now revolutionized and attached to digital.

To attract new customers – customers who are always linked to evolution, innovation, development and, above all, more mobile customers than ever before – banks have a duty to offer exclusive, futuristic and completely revolutionary services.

The bank today, as defined by Phillip Jean, has a digital duty (http://www.jphilippe.com/le-devoir-digital/).

Phillip Jean, for whom « technological evolutions (…) should upset our relationship with money » think that  the end of the reign of the banks will arrive if they delay to revolutionize and perfect their services. There is thus a « strategic interest » for banks to innovate.

(http://www.strategie-aims.com/events/conferences/6-xviieme-conference-de-l-aims/communications/1626-peut-on-parler-dinnovation-dans-le-milieu-bancaire-le-cas-dune-banque-de-detail/download)

Competition between banks and banking services reinforces the fight for innovation more and more harshly.

Furthermore, many services have appeared in recent years for 20 years. A banking activity that was until then mainly focused on a traditional link with its clients, a real relationship between a bank agent and a client, tends to disappear.

In fact, customers no longer go to a bank. Instead of this, they establish all their shares from their cell phones. « The progress of NICTs has revolutionized the functioning of banks »

(http://www.strategie-aims.com/events/conferences/6-xviieme-conference-de-l-aims/communications/1626-peut-on-parler-dinnovation-dans-le-milieu-bancaire-le-cas-dune-banque-de-detail/download)

This digital development can exceed the link that customers maintain with their banks.

Moreover, banks act as intermediaries between customers and digital payment / withdrawal systems such as Visa and MasterCard tend to disappear

According to Les Echos, « MasterCard and Visa announce their digital wallet »

(https://business.lesechos.fr/directions-numeriques/digital/mobile-et-nouveaux-ecrans/0202583583451-mastercard-et-visa-annoncent-leur-portefeuille-digital-5039.php)

Therefore, « Online banks and mutual benefit from this mobility to the detriment of commercial banks« .

The attractiveness of banks is the main reason for the development of this mobility. According to Les echos, the main reasons that a customer decides to move from one bank to another:

  • 29%: the quality of  the service is more advanced, more elaborate (« availability and responsiveness of advisors ») for the prices charged by the bank (value for money)
  • 44%: daily banking fees
  • 15%: the mortgage rate
  • 11%: return on savings products

(http://www.lesechos.fr/21/05/2015/lesechos.fr/02184003740_2-millions-de-clients-changent-de-banque-chaque-annee.htm#Tq2LbUJOxiTxykC3.99)

How do banks adapt to our existing unsatisfied needs? And what are the innovations that reflect, unbeknownst to us, the world to which we belong?

(http://www.leparisien.fr/economie/business/banques-toutes-les-innovations-numeriques-16-02-2015-4538197.php)

A large number of innovations can be identified, undoubtedly the bank by smartphone is the most known of them, this also shows that banks have understood the main issue. ‘Today it is possible to open a bank account from your smartphone’. All the banking services are now gathered behind a mobile banking applications including bank transfers, secure online payments, videoconferencing with your banking advisor, scholarship, documents and contracts, etc. Contactless payment is the best mirror of our generation with a prompt payment that tends to save time to customers.

However, digital development goes with some security issues and the development of cybercrime in the 21st century. To fight effectively and radically against this new threat, banks are taking on their responsibilities by financing for your security and safety, by introducing new methods and techniques that limit the risk of being hacked including dynamic cryptogram and biometric security, the most simplistic and safe authentication solution possible .

Ultimately, competition and new entrants are the main principle that affected banks to invest in innovation, they see it as a way to enter new market with a target market shaped by digitalization.

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