Does the networked consumer imply incremental or fundamental change for banks?

A really interesting discussion with a group of banking
people this week about the impact of mobile and tablet computing on the banking
world.  I call this change the networked consumer, and it's a phrase that is meant to wrap up the whole discussion of the mobile internet and how it is affecting consumers attitudes to money, banking, relationships and life.

The take-away for me was that most of the people did not
believe that mobile was a fundamental change to the banking world, but just an
evolution in distribution.

That’s interesting as it is at opposites with my own opinion,
but then I’m biased as I think this is real change and it is fundamental.

So here’s the opposite opinions explained in a little more
depth and I’m interested to know your opinions too?

This is incremental
change

We have seen major technological changes throughout the past
decades from mainframe automation of the back office to desktop automation of
the front office.  Now, it is purely a
further evolution of change to see the internet and mobile developments giving
consumers the ability to self-serve and communicate 24 by 7.

For banks, this has demanded that we adapt, and we are doing
just that.  Our core systems are being
upgraded, we offer apps and mobile access, we are incorporating Facebook and Twitter
amongst our services and we are generating innovations in our other outlets –
branch, ATM and call centre – to ensure that this is all delivered
consistently.

Therefore, we have not underestimated mobile internet
demands for change and, incrementally, we are upgrading to maintain
competitiveness in delivery.

This is fundamental
change

Banks historical structures are being fundamentally
challenged by technology.

It is not just mobile, internet, networks or computing
change that is creating this fundamental change, but the ability this change
gives to empower the customer.  That is
why so many industries have collapsed over the past twenty years – books,
music, films, entertainment retailing being the most obvious industries – and goes
further and deeper than this. For example, anyone, anywhere can now connect with
anyone else, anywhere else.  The whole
planet has become connected.  That is the
big change and banks are only responding to this change slowly and
incrementally because they have been protected from that change by their regulatory
structures. 

If banks did not need licences, they would see far more
change.  Even with licences, new models
of finance are emerging to subvert or displace the need for banks such as Zopa,
Wonga and Bitcoin.  In other words, banks
will be dead meat if they truly believe this is just incremental change.

What do you think?

We will be debating this in depth at the opening session of
Innotribe at SIBOS on Monday 16^th September in Dubai so please
provide views here, or there on the day, and we will see the truth. 

Innotribe opening plenary: The future of Money, the
evolution of business models

Monday 16 September
09:30 - 10:30
Innotribe - INN

Since Sibos Toronto in 2011, the "Future of Money"
has become a standard fixture of the Innotribe programme. With standing room
only at Sibos Osaka, this session is a perfect way to open our programme – the
first stop on our journey together.

Our industry is being challenged by aggressive new-comers
who experiment with creative strategies and dramatically different business
models. How can banks react? How can we make the ‘cake’ bigger for everybody?
Taking inspiration from other industries, there are several choices: unbundle
the current model and focus on excelling in one specific area, transform our
institutions into long-tail business model organizations, or partner with the
newcomers in the business.

In this session, we will identify how the current model is
being disrupted and how this impacts costs and revenues. We will co-create the
corporate banking business model of the future, using the Business Model Canvas
methodology of Alex Osterwalder (www.businessmodelgeneration.com).

To guide us, we have selected six dimensions of influence:
social and mobile, infrastructure (technology), transparency, transaction
costs, organizational models and big data.

Speakers

• Scott Bales, Chief
  Mobile Officer, Moven
• Udayan
  Goyal, Partner and Co-Founder, Anthemis Group
• Dave Gray, Author,
  The Connected Company
• Dan
  Marovitz, Founder & CEO, Buzzumi
• Patrick
  Murck, General Counsel, Bitcoin Foundation
• Chris
  Skinner, Chairman, The Financial Services Club
• Hank Uberoi, CEO,
  Earthport