Banks, no time to gaze at as-is business models
October 9, 2018
October 9, 2018
Findings from an Accenture quantitative study on the banking industry structure shows that 17 percent of players in 2017 joined the market since 2005. They now command one-third of revenue growth in Europe. Newcomers include challenger banks, non-bank payment institutions, credit intermediation platforms and bigtech that are having impact across numerous countries. In China, for example, Alipay and WeChat have more than 1.3 billion mobile payment users and account for 94 percent of that market.1
In the UK, 63% of new players have taken some 14% of revenue.
What was once a very stable industry has become a fragmented, highly competitive and open landscape. For incumbents, simply being a digitally better version of themselves is unlikely to be a winning strategy.
Market contexts create a wide range of options for banks in choosing their to-be models. From careful consideration of the two principal dimensions for measuring market disruption—the level of market fragmentation and the level of revenue migration—we identified four likely scenarios of how banking markets will evolve. Not all business models are equally viable in each market.
Four market categories to consider for winning in the digital economy
Our Winning in the Digital Economy report introduced four archetypal business model choices for retail and commercial banks that would address changing customer needs, exploit new technology and guide banks’ strategic decision making in the medium term. These were: Digital Relationship Manager, Digital Category Killer, Open Platform Player and Utility Provider.
Four digital-ready banking business model choices
Focused problem solver. Branded. Tech-driven.
Trusted advisor. Customer-centric. Ecosystem curator.
Scale/low cost. Ubiquity. Non-threatening.
Liquidity. User-generated content. Social.
We can help incumbent banks keep pace with market changes, choose their winning North Star business model and rotate to it quickly for growth. Download our report and watch the video below to learn more about the research findings and five actions.
Accenture's Alan McIntyre explains why banks must pivot wisely & quickly to new models—or risk being left behind by a changing industry. See more.
View Transcript1 China Economic Review, “UnionPay Struggling in Mobile Payments Era,” August 1, 2017
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