Banks and traditional financial firms have been hearing how they will soon be made obsolete by the slew of fintech barbarians at the gate to steal their customers for at least a decade. But by and large, customers are still staying with their traditional banking relationships.
Still, banks can’t rest on their laurels. They need to innovate and provide cutting-edge digital services to a customer base that increasingly expects that kind of experience in all facets of life. A report this week from the International Monetary Fund takes it a step further, saying banks must evolve or risk being “left behind.”
“Some will be left behind no doubt,” the paper states. “Others will evolve, but must do so quickly.”
Now, we are generally skeptical when it comes to proclamations that tech companies will put banks out of business. Banks simply are too entrenched and have many incumbent advantages to be easily wiped out. But not every bank that exists today will be around 20 years from now, and the smart ones are already investing in the digital services that customers are demanding.