8DECEMBER - JANUARYOPINIONIN MYWill Neobanks Replace Traditional Banks?Recently, I read an article written by Amaury Goguel and Sabrina Chikh at Skema Business School that raises an important question about how incumbent banks will survive in the future. In this article, I will outline the key drivers of digitalisation and explain the major challenges in digital transformation.As we explore the world of digitalisation in traditional banks, it's clear that neobanks, fintech, and big techs are continually stealing the market share NAVIGATING DIGITAL TRANSFORMATION FOR INCUMBENT BANKSBy Ozgur Koc, Head of Digital Banking & Transformation, Credit Europe Bank N.V.that older banks used to enjoy. Research conducted by Cornerstone this year reveals an important fact: nearly half of all newly opened checking accounts in the United States are with neobanks. Neobanks, with a 15 percent market share, have opened 50 percent of the newly created accounts. Then, we need to ask ourselves what the future will be for traditional banks. And it seems many traditional banks will shrink, merge, or disappear in the next decade. Figure 1At the same time, another research shows that customers prefer neobanks. According to research by Bain, neobanks tend to have significantly higher customer advocacy scores than their traditional counterparts. Figure 2In this challenging environment, incumbent banks must take decisive action to ensure their survival in the coming decade. That's why accelerating digital transformation is no longer a choice.Ozgur Koc
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