[by Kaia Roquist]
Several leading banks have recently stated they are moving towards the title technology companies. Their prediction is to no longer be banks – rather they will be technology companies with bank licences. Facebook state – and continuously underline – that they are a technology company. And recently they have become a technology company with a banking license. So who is what? And what is the difference?
Regarding the protection of end users’ personal data, it is difficult to applaud the entrance of a third part service provider as a shim paper between the customer and its bank – particularly since GDPR is not going live until May 2018. PSD2 has profound effects on both market dynamics, but even more on end user interests. Third part service providers are not aiming for the title “Bank”, they are aiming for the title “Personal Life Console”. I doubt this is a scenario bank customers relate themselves to when they shortly will be posed the question whether they want a social media service provider to be their primary contact surface towards their financials.
To ensure a well contemplated decision made by the customer, there need to be some clearly defined alternatives. When everybody claims to be technology companies with bank licenses, then what is there to choose from?
The banks have a unique opportunity to differentiate and define themselves with respect to the mandate, responsibility and competence they possess. I do hope banks in the future will define themselves as banks – because in the end I would prefer a bank to be my financial advisor and service provider. Considering the market development, I do hope my future bank will invest heavily and intensively in technology and innovation to ensure secure, adaptive and convenient solutions alongside professional guidance, excellent customer service and personal advice.
Banks are institutions, not brands. As respectable, trusted and reputable financial institutions banks can and should build and develop competitive technology companies that are superior on user experience, innovation and performance excellence on security. Banks have the market position and opportunity to create, nourish and own innovative brands that last.
Do not make the bank a brand, and never make the brand a trend. Let the bank own the brand – and remember to brand the brand.