By the power of LinkedIn, I found myself reading through a new KPMG publication titled: 'The Changing World of Money'.
Authored by Richard McCarthy, Head of UK Banking, and Warren Mead, Head of Alternative Finance, at KPMG, it is a warning shot for Retail Banking that it is in danger of having its lunch stolen by the combined power of alternative finance and FinTech.
There is not much new news for those of us immersed in the industry, but there are enough interesting snippets and soundbites to make it worth the read. Amongst my favourites are:
We are left hanging on an answer to what the banks' response will be. We are told that they have the people and the resources to be fast followers - 'the challengers to the challengers' - but not how they will be deployed. The question though is if they have already left it too late.
HSBC may indeed be allocating £6bn to local lending decisions, but as Graeme Marshall, CEO of FundingKnight, pointed out in his blog, a whole generation of experienced lenders has been lost. How long will it take to find and train the new ones? We have young people growing up who no longer associate payments with going to the bank, and the point of a bank deposit account as anything more than a number 2 current account has long been forgotten.
The banks have survived challenges before, but the difference this time is that consumers are embracing and supporting the challengers rather than being suspicious of them. The depth of the banks' wallets and their hold over the retail banking market will insulate them for a long time, but as McCarthy and Mead point out, the biggest inhibitor to Alternative Finance is its lack of awareness, which, in itself, shows what the huge untapped potential is.
Neil is a Chartered Marketer and Fellow of the Chartered Institute of Marketing with many years' experience in marketing, brand and communications.
CEO / The Marketing Eye
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