Home / Columnists/ Banking is necessary; banks are not: Bill Gates

Banking is necessary; banks are not: Bill Gates

Comments / {{hitsCtrl.values.hits}} Views / Friday, 11 January 2019 00:00



To those who say that Apple did not kill the music industry, being forced to buy the entire music album did, Amazon did not kill retailers, long queues at the local store did, AirBnb didn’t kill the hotel industry, limited availability of hotel rooms did, Uber didn’t kill the taxi business, waiting to flag a ride home did. Technology alone is not necessarily the biggest disrupter. Customer experience is. 

Without doubt, sophisticated technology and data-driven insights can considerably improve the banking experience, making it simpler, easier and more secure for customers. But if we were to combine the trust of our customers with the convenience technology offers, we will undoubtedly create “banking of the future.”


The revolution begins 

Gone are the days the banking license was required to do banking, entry barriers are now shattered, competition from fintechs and telcos has escalated in leaps and bounds, block chain has emerged as an alternative platform, now even more accessible than ever. Customer demand is at its peak and it can get only more demanding.  

While the strategic landscape has changed for good, the banking industry in Sri Lanka is fragmented by a host of institutions flurrying to provide that unique and desired customer experience. The approach varies with some banks making incremental changes, while others embracing a more radical realignment. For a few banks, the creative element is achieved from investment in building internal capabilities, while others collaborate with third parties. 


Disruption becomes a constant 

We witness examples of cross-industry incubation and technology accelerator labs where ideas can be nurtured and tested in experimental environments. The approaches taken indisrupting the banking model are novel and diverse from bank to bank but most definitely share one common goal: to achieve that “perfect” customer experience. In an era of exponential change, the speed to market becomes the most critical factor in meeting the rapidly evolving needs of customers, defending increasing competitive pressure and managing specific challenges of banking especially in a developing country like Sri Lanka.


Profiling the customer

Demographically, Sri Lanka hosts a dynamic age structure that includes 42.6% population that falls within the age bracket of 25-54 years.Birth rate increased during the last few years resulting in the 0-14 year old age bracket hitting 24.1% of the total population. It is evident that these demographics are concentrated around Millennials’ who have naturally, demonstrated tendencies to be more dissatisfied with existing services, less loyal, and more likely to be driven by price and convenience. These digitally native, more entrepreneurial customers will conveniently demand for new products and services as their income levels rise and technology advances. 


Reinventing the customer experience

Banks who do not get their innovation programs right might as well become irrelevant as business beyond banking calls for banks to become more entrenched in customers’ day-to-day lives. “The more times we connect, the higher the potential to form a long-term relationship with the customer, which reduces the likelihood that they will switch banks.” as quoted by a CEO. Emirates NBD for example launched “Liv”, a lifestyle-oriented” bank for Millennials, delivering a very distinctive customer experience through digital banking focusing on the new generation.


Disruptive technologies continue to impress 

Fintech businesses such as Alibaba, Tencent & Baidu are already expanding beyond payments to offer customers investments, deposits and insurance. Sparked by innovation, smart banks around the world are introducing fresh thinking in a bid to stay abreast of the competition. Their aim is to improve the customer experience and capture new markets.


Building brilliant banking ideas

In Indonesia for instance, “floating banks” are acquiring new customers by traveling to nearby islands while polish customers can now use a smartphone app to request a “mobile ATM” — stored within an electric BMW i3 — to come to them at a specified place and time. In Kenya, banks are partnering with mobile network providers to evaluate the credit risks of first-time bank customers through transaction history, already completed KYC checks and due diligence. 

Similarly, one of the most striking uses of GPS technology was to limit the risk of loan default and recently won an innovation for social, sustainable and responsible banking. This involved an IOT device in a newly financed car with the capability to identify the exact location of the car and deactivate the engine if a customer repayment fell overdue limitingpotential risks and expanding the universe of consumers who could thus qualify for loans.


Innovating for tomorrow

At the forefront of this revolution the question is raised, can the banking sector really become the employer of choice for the young entrepreneurs they need? Customer-centric and entrepreneurial staff will continue to challenge banks to create new ideas for delivering products and services to customers and the banks need to commit to transition staff from the typical transactional to a more dynamic advisory role in order to deliver expectations of the ever demanding customer. Humans will be customers only for 1% of their time and remain “human” during the balance 99%. If banks limit their effort to that 1%, not only will they miss the feelings, dreams and ambitions of their customers but fall into the exact same category of their digital counterparts. Robots! 

(The writer is a fund manager and banking professional with over 10 years of experience in capital markets advisory, investment banking, portfolio management and corporate finance, qualified with Master’s degrees in finance and management strategy.)


Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Whither Sri Lanka?

Wednesday, 19 June 2019

On Easter Sunday, 21 April 2019, suicide bombers from an extremist group caused carnage in six separate locations in Sri Lanka. Over 250 lives were lost and as many injured. The magnitude and co-ordination of their operation indicate several months o

Our Cricket Board simply cannot deliver – why not they all quit honourably?

Tuesday, 18 June 2019

“It is necessary, therefore, for the Government to pay serious attention to the doings of Sri Lanka Cricket [board] and take immediate action to lift their game for the progress of our glorious game.” Question for Sri Lanka Cricket (board) Sri La

Yesterday Tamils, today Muslims and tomorrow who?

Tuesday, 18 June 2019

From the time of S.W.R.D. Bandaranaike’s election victory in 1956, one and only one issue had dominated political party campaigns in this country; and that was communalism. The Tamil community was the main focus of these campaigns for over 50 years

Those who go by social proof are easy prey to crafty schemers

Monday, 17 June 2019

Going after social proof Swiss writer and novelist, Rolf Dobelli, in one of the essays in his 2013 book ‘The Art of Thinking Clearly’, has given a fine warning to his readers. He has warned against going by ‘social proof’ or ‘majority view

Columnists More