Eruptive markets: 2 reasons for the new order of the banking landscape
When did you last go to a bank counter or talk to your banking consultant? Are interactions decreasing? There’s probably a reason for that…
1) Banking transactions via app
New FinTech businesses like PayPal or Square are driving the eruption of the finance industry. These businesses mainly assist dealers in cashless or contactless payments. However, they also go further and allow end customers to make transactions or to invest in cryptocurrencies. Other financial services are currently being developed.
2) The rise of cryptocurrencies
Not too long ago, cryptocurrencies, like Bitcoin or Ethereum, had a tarnished image. They were often associated with money laundering or illegal operations. But today, even central banks are looking into the new opportunities. Tesla and other businesses have already invested in Bitcoin and other cryptocurrencies. A recent auction at Christie’s reveals the extent of this trend: a few weeks ago, a digital artwork was sold as an NFT for over 60 million dollars. The buyer paid exclusively in Ethereum.
To put it in a nutshell: The vision of carrying out “all banking transactions via app” and participating in the “success of new cryptocurrencies” are making the traditional banking landscape obsolete. The new FinTech businesses are even planning to offer business loans and deposit products as part of their services.
Our research on financial services has shown that one of the central psychological motives in the quality of the relation to the bank is ‘independence and respect’. Up until now, the personal contact to the banking consultant has fulfilled this need (caring principle). If FinTechs keep on pushing into the market with their apps, this important connection will disappear. Consumers will then be able to take their individual wishes for independent financial security and stable growth into their “own” hands.