At Grow Advisors we are working with an increasing number of established banks and lenders, as they meet the challenge of preparing the next generation of services.
Here are the 5 main themes driving digital transformation in banks today:
They seek efficiency and convenience in all services they use, including banking and investing. In many markets, a significant number are looking to refinance student debt, as well as new and cheaper ways to financing major purchases.
Growth is being fuelled by tech-savvy millennials who have little loyalty to banks and who are beginning to control progressively larger shares of world’s financial assets.
2. Savers hunt for yield
Governments and institutions are under increasing pressure to balance the need to cut interest rates to spur stagnant economies, with availability of viable savings vehicles. The UK, among others, has spearheaded the inclusion of p2p and other alternative finance products to be included in long term savings and retirement plans. Tax benefits encourage both the supply and demand side of alternative finance products and seen as a growth driver.
3. Unmet funding needs
Almost 10 years since the onset of the global financial crisis, small and medium business continues to suffer financing gaps. This is perhaps the single most important factor that led to the birth and growth of the sector. In addition, banks looking to reduce costs of setting up and service loans, burdened by increasing capital requirements, have decided to further reduce lending to certain customer segments. The ability to offer cost effective funding is a factor that has allowed independent platforms to step in, taking away business from the traditional sector.
However, today we are seeing an increasing number of established banks and lenders develop in house platforms, clawing back the advantage from independent platforms.
4. Credit Card Debt
Despite falling interest rates, credit card rates have been largely untouched. As options increase, it is not surprising to see consumers consolidate credit card debt via alternative finance platforms. It's debatable whether this refinancing is positive for the industry. What it does point to however, is increasing competition for the traditional lenders who struggle to match rates.
Perhaps the most important factor driving change - the need to offer services loved by customers. Today, consumers have come to expect efficient, pleasant experiences not dissimilar to Amazon, Apple and Netflix.
In a recent study conducted among millennials and HNWI, participants were asked who they would entrust to manage their finances. Across both segments, they answered Google. They felt new services, personalised and built on data insight would be superior. They also felt there was nobody better placed than the tech giants - and that they already had access.
The market is changing. Progressive companies are rethinking their digital strategies. Get onboard.
Grow Advisors, Asia Pacific
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Grow Advisors is proud to support the transition to digital finance around the world. Our team offers consulting and professional services on online asset and wealth management solutions, lending and p2p, crowd investing and fund raising around the world. We are uniquely placed to cover both planning and executional aspects of all our ideas.