LOYALTY BANKING
“ Banks need to infuse humanity and personalisation into these digital channels ”
CORMAC QUINN FOUNDER AND CEO , LOYALBE
“ table stakes ,” as Quinn calls them . Indeed , with Morgan Stanley claiming that 80 % of Gen-Z customers are already actively exploring mobile finance options , the ability of banks to ‘ wow ’ this demographic with anything less than cutting-edge technology is unlikely . “ Banks need to begin thinking and acting like tech companies who experiment , move quickly , and build the future products and services today . If they don ’ t act fast , they risk tech companies encroaching into financial services and disrupting them ,” says Quinn .
Capitalising on inherent advantages A positive future for traditional banks will be predicated on learning to adapt and also capitalising on their own strengths . Challenger banks , although increasingly popular , have a distinct profitability issue that Cuthell links back to their origins as secondary , lower-deposit alternatives for initial adopters . Early investment , she continues , has generally been allocated to customer acquisition in the short- and medium-term . While this weakness remains , incumbents will retain the advantage of market longevity and financial security , a foundational component of loyalty . More recent studies have even found that 83 % of customers find traditional banks more trustworthy overall .
However , Cuthell cautions that failure to capitalise on this and introduce the best aspects of digital banking into the traditional sector will be a losing strategy . “ Many digital attacker ( disruptor ) banks are now expanding from retail to small business accounts , from deposits and basic transactions to lending . This is diversifying revenue streams , and Bain ’ s analysis conducted with Thought Machine indicates that a digital attacker launched on a modern , cloud-native platform could have a cost base that is 60 % to 70 % lower than a mid-tier legacy bank .”