Digital Banking - FinTech is cannibalizing Banks
The best job in banking: Chief Cannibal
“Everybody missed the [job] title that will be the most important one in the future: the Chief Cannibal.
The Chief Cannibal runs the internal Cannibalization Department, a group with the one pure mission: destroy our business.
The focus of the cannibals is to look at every part of the bank and see if they could destroy it. Using technology, new structures, new thinking, new business models, the aim of the cannibals is to knock down the sacred cows within the bank, leap across the product silo’s and challenge every nuance of thinking.
Of course, the cannibals are really annoying – who wants to get eaten? – and they don’t necessarily appear on your doorstep every day but, when they do, prepare to be destroyed. (...)
That is why banks need an Internal Cannibalisation Unit and, if I could get that job, I would be happy to be nominated as the Chief Cannibal. In fact, it would be a pleasure, as I enjoy a bottle of Chianti.” *
About this publication
OCTO Technology, an IT consulting, design and implementation company, presents a White Paper on digital banks. While the Digital age has seriously affected companies across all industries, banks are still slow to enter the race despite early signs being observed.
Starting with visits to bank branches: the global trend is downward and isn’t expected to improve since most financial instruments are now accessible online. The use of “mobile first” trends are driven by the growing habit of using everything digital – “anywhere, anytime, and most importantly, whenever I want.”
FinTech + digital natives: Here comes the future of banking Innovation!
Since the subprime crisis, the mismatch between banking and real economic and social life has echoed in our governments calling for more competition, aware that the banks do not meet their commitments in financing the economy. The Digital Technology has resulted in the creation of new players who will destroy banking as we know it today.
"Fintech has started to cannibalize banks, grabing their share, " says Sylvain Fagnent, Senior Consultant Expert in retail banking. They excel in meeting the real customers’ needs and sometimes reinvent a way to do so by focusing on front office, where the value is: CP Payment or P2P, credit , e-payment, loans to individuals, couponing, charging...
The "must do" of the digitization
Is it the end of traditional banking? "Not yet. But historic banks have to take into account these new players," declares Stephen Périn, Senior Consultant at OCTO Technology. In this White Paper, the two OCTO consultants give a detailed account of several possible approaches to take the digital turn becoming data driven and valorize their customer data like Square, Kabbage or Yoddlee do. They are simultaneously working on Big data, building architecture in real time, integrating the social network like Fidor which, thanks to its strategy with the social media, displays an acquisition cost below 25€ representing 10 times less than the average rate in US, opening up innovation by exposing services which can be used by an ElCurator activity, taking part into Fintech incubation projects as well as competition of the hackathon type.
"It is vital to keep a pioneer mind because there are very few complete digital banks, the new usages are yet to be written," says Stephen Périn who assists many customers in the digital mutation of their companies.