PA business transformation experts Olaf Valentin Kjær and Steen Rud Hansen are quoted in an article in Jyllands-Posten about the future of the global banking sector. The article examines banks’ biggest challenge in years: how the increasing use of the internet and mobile phones by customers poses a threat to the way banks operate, and how IT companies may be taking over the sector.
The article covers how less than 10 per cent of Danes use their local bank branch and how Danes now prefer to use online banking, mobile banks or their credit card.
Olaf says: “Banks need to make themselves more relevant to their customers in order to overcome this major threat. We no longer visit our local branch, but rather shop around for various bank services online … the entire bank structure is being redefined. New types of banks such as Coop Bank and UK’s Tesco Bank are part of an entirely different value chain, and their profitability is measured in completely new ways.”
According to Steen, today’s banks have three options: “They can choose to continue their operations in the traditional way, but they will end up losing the battle. Alternatively, they can reinvent their processes. However, due to the complex nature of this, the costs related to these changes will probably overshadow the benefits. Finally, banks have the choice to start from scratch and establish an entirely new bank with new partnerships. This is an option which banks will inevitably have to consider.”