Financial industry has been under constant digitalization for decades. For example, our money has been stored in digital format since who knows when.
In whatever way the race goes in the financial industry, we will see solutions that will change the current paradigms more or less in the way how customers use financial services. We will also see new business models emerging that will shape the financial industry. As the result of the competition, the customers will have more options than ever to choose from the different array of financial services. Hence the core of success of the new services will be the in the service providers’ ability to solve customers' problems and delight them with exceptional service experience.
The first meaningful outcome of digitalization, from the customer’s perspective, emerged in the early 90s when the first online banking applications became common. Since then digitalization has progressed rather steadily in the financial industry, bringing new services and technology for the use of the customers.
As a result, the focus of everyday banking has shifted from taking place in fancy branch offices into online services. In general, people under their 30s or 40s probably do not even know how customers used to form long queues in front of the teller just to pay their bills and withdraw cash from their accounts.
Will disruptive mobile innovations win the game on mobile payments?
Today one of the hottest trends in the financial industry is mobile services and their development. During the last couple of years, mobile banking applications have emerged from having just very basic services to offering a diverse suite of financial services covering banking, wealth management, and non-life insurance services. At the same time the number of mobile banking application users and frequency of usage has skyrocketed.
"Competition around mobile banking services is fierce"
An interesting phenomenon in conjunction with proliferating mobile banking services is the vast number of new entrants to the industry. Competition around mobile banking services is fierce, especially in the mobile payments area. There are over one thousand new start-ups in the world that are trying to win the race for becoming the next winning solution for mobile payments. Additionally, there are the established financial institutions and digital giants, such as Google and Apple, competing alongside the start-ups. The same phenomenon is happening also in the other areas of financial services, although the competition is not as intense as it is in the mobile banking arena.
Even though the future of digital mobile banking services is not exactly known, we know something about the outcome: Digitalization will continue to enhance the lives of people also in the financial industry and the customers will have a decisive role in determining the winners in that competition.