Predicting the future is notoriously risky. Yet CEOs are supposed to be modern day soothsayers. Well, let me assure you, I’m no futurist. My job does not come with a crystal ball and I don’t claim to have special forecasting powers. Nonetheless, having a sense of the future is critical for business.
The ability to spot new trends can reap great rewards for a company. Getting a jump on competitors can mean the difference between success and failure. Which is why innovative minds in the corporate world work overtime to gain meaningful insights about the future.
Long range vision is facilitated by predictive analytics which uses current and historical data to try and predict “what’s coming next”. We all know the future will not be more of the same but how will it be different? Specifically, how will the business landscape change over the next decade?
The history of predicting business trends is a tale of misjudgments. As I outlined in an earlier post, The certainty of uncertainty, I’ve always had a healthy scepticism of oracles. They offer bold proclamations which invariably turn out to be wrong.
Recently, I read an article by futurist, Thomas Frey, who claims that by 2030, “the average person in the U.S. will have 4.5 packages a week delivered with flying drones. They will travel 40 per cent of the time in a driverless car, use a 3D printer to print hyper-individualized meals, and will spend most of their leisure time on an activity that hasn’t been invented yet”. Hmm?
Right now, the degree of uncertainty in the business world is immense. No one really knows what the future holds and this is definitely the case in banking. But that does not stop people from making educated guesses. What we do know is that financial institutions are facing irreversible change from new technology, increased regulation and altered consumer behaviours.
According to accounting group, PwC, retail banking will look very different in 2020 than it does today. Customers will demand higher levels of service and value. Technology will change everything with biometrics (eg, fingerprints, voice recognition) becoming commonplace in transaction authorisation.
PwC also believe that by 2020 social media will be the primary medium used by financial institutions to connect, engage, inform and understand customers. Also, the importance of branch banking is expected to diminish significantly as customers migrate to digital channels.
Another consulting group, Accenture, believes banking is moving into the era of convergent disruption. This describes an environment where there is convergence between banks and other players - like telcos and start-ups - from outside the traditional banking sector.
In reality, this convergent disruption has already started. As I outlined in my post, Rise of mobile banking, the days of banks and other financial institutions being the sole providers of banking products are over. Amazon, Facebook, Apple and Google are now competing to become part of the financial habits of their customers by developing mechanisms to effect mobile payments.
PayPal was an early mover in disrupting the payments space and now dominates web online payments, but other start-up challengers are emerging. There are those (and I’m not one of them) who believe that the cryptocurrency, Bitcoin, will prove to be the single biggest disruptor to banking and payments in the longer-term.
It’s clear that the way consumers will pay for goods and access funds in future will change. The use of contactless “tap and go” technology will explode and withdrawing cash from an ATM using a Smartphone will be commonplace. The security and convenience of mobile phones and thumbprints will render swipe cards obsolete.
Get ready for a brave new world of banking ‘cause, as the cliché goes, “the future ain’t what it used to be”.
Paul J. Thomas
Posted Monday, September 15, 2014 1 Comments Make a comment