The Future of Digital Banking
Brianna Rose Newcastle 17/04/19
Entrepreneurs Society, Newcastle University
The Future of Digital Banking was launched from the events of 2008, as a new breed of banks began to form via opportunistic entrepreneurs breaking down formal banking to rebuild the trust between the consumer and the bank. Tech startups such as Monzo and Atom Bank have disrupted traditional banking methods and began to form a platform with a focus on modern-day digital media.
Innovation is vast within this sector and the race continues to be the superior digital banking platform, that is the one that provides the most value to consumers. These innovative start-ups have begun to create major changes in the banking industry.
Firstly, when a start-up is created with the aim to disrupt the marketplace already formed, it leads to a lack of formal rules and guidelines, meaning these digital baking start-ups are able to refine how banking should be done. The lack of bureaucracy and a culture that is against employees claiming ‘this is how it is always done and this is how we'll always do it’, a fresh breed on innovation is able to form, meaning new ideas and processes are being valued instead of looked upon as being too costly or having too many regulations to be able to implement.
Atom Bank are aiming to utilise new approaches and implement them to enhance their service. They are doing this by posing questions such as ‘If we were to re-invent the overdraft, what features would this offer?’ in Hackathon style events using students — the future generation of entrepreneurs — to provide alternative ways to serve customer’s needs. A key change that has been created in the digital banking sector is the removal of branches. Both Monzo and Atom Bank have no branches at present and are not looking to invest here. This encapsulates digital banking as it reduces the capital needed and means more investment is available to be implemented in creating a platform which is flexible and fit for the customer's requirements.
The future is vast and exciting for digital banks. As these banks gain more influence in the market, trust for them will begin to grow, helping digital banks to refine their functions even further. It could be argued that in the next 5 to 10 years banking will be nothing like we have seen and used before, perhaps the concept of a ‘branch’ will not be used in our vocabulary. What can be said for certain is how traditional, rigid banking methods are, even more, becoming something of the past. Those banks which will succeed will be the ones that utilise the opportunities of the digital age, embrace innovation and understand the changing needs of the user. So, with digital banking helping to redefine what banking means to the individual and the marketplace, it is up to the entrepreneur to act upon digital banking opportunities where able and for the customer to become accustomed to the latest digital banking platform.
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