2016-04-18-奥纬咨询-The_Digital_Disruption_Battlefield_19页_725kb

Digital Disruption in Financial Services

Introduction

• Digital technology is rapidly transforming the financial services industry.
• Traditional banks face threats from smaller, tech-focused players like FinTechs and large non-banking firms (e.g., Apple, Google) who offer lower costs and superior user experience.
• Competition has already impacted industries such as retail and bookstores, suggesting similar outcomes for banks unless proactive measures are taken.

Key Threats

New Competitors

• FinTechs: Proliferating, focusing on specific markets (payments, lending) with technological advantage and low overheads.
• Tech Giants: Companies like Google, Apple and Amazon, leveraging established distribution networks and data analytics to encroach on banking services.

Evolving Competition

• Emerging trends include mobile money transfer (P2P payments), neobanks, and partnerships of traditional banks with telecoms and insurers for integrated services.
• Geographic variations, especially in Africa, show higher digitization and novel approaches.

Industry Trends and Investments

• Investment in FinTechs has surged; 2015-2017 investment over $23.5B worldwide.
• Focus areas include payments and consumer lending.
• Regions like the UK and EMEA are particularly hotspots for digital innovation.

Financial Services Challenges

• Banks must contend with:
  • Lower interest rates and high regulatory compliance (post-2008 era).
  • Operational constraints from regulations (MiFID, PSD2 forcing some openness), which limit their ability to compete purely on cost.
  • Rising customer expectations due to digital native competition, demanding personalized, omni-channel services.

Bank Responses & Strategy

Recommended Strategy

Three-step strategic framework:

1. Understand digital disruption’s likely impact.
2. Challenge existing business models by adapting internally or externally.
3. Define response options, including cooperation or in/acquisitions.

Business Models

Three archetypes:

• End-to-end Provider: Direct provision of all services.
• Bank-leader Modular Offering: Core banking with partners for choice and integration.
• Partner Leader Modular Offering: Outsourcing front ends and customer interfaces to partners to leverage ecosystem strengths.

Case Studies

• Example 1: Fidor (Germany) – Open architecture modular banking.
• Example 2: Orange-Mbank (Poland) – Telecom leveraging mobile banking services.

Examples illustrate effective integration/partnerships for disruptive innovation.

Conclusion

Digital disruption continues to progress, and traditional banks cannot ignore it; they must identify threats, leverage existing competitive advantages (scale, regulatory license), and strategically choose paths forward (innovation, acquisition, partnership).