In case you missed it, 2016 is quickly becoming a year to remember in digital disruption of financial services. The two momentous events you need to look at are DBS launching their mobile-only Digibank in India, and the upcoming launch of O2 Banking, the mobile lovechild of a startup and telco (Fidor & Telefonica).
What’s the story here? A sea change of digital banking.
These aren’t mobile banking apps.
These are mobile-only banks.
This is your Über moment
You might be wondering what separates a startup like Fidor from a bank? Both offer a banking app. Both have banking licenses. Walks like a duck, talks like a duck?
Cost. Massive, immovable cost. Human. Material. Immaterial. Everywhere. Glossy branches. Tellers. Automatic and human. Office towers with fountains. Commissioned sculptures. Armies of lawyers. Committees. Armies of middle managers. Committees about having more committees. Armies of auditors that audit the other armies.
Banks spend an average 65% on branches, yet only 12% of interactions happen there
Just like Über and taxi companies. Both have apps. Only one has massive fixed costs that prohibit scale. The other is mobile-only. Just a digital platform, that can scale almost infinitely. Ask yourself, are they on equal footing to compete in today’s marketplace? Tomorrow’s marketplace?
Learn from DBS, or lose your footing
Do what DBS did. It’s really that simple. They’re also a bank. They have branches, offices, fountains and tellers too. Yet they decided to try, well… not being a bank.
Digibank is a real digital bank. Mobile-only. No branches. Just an app. See here’s the difference with mobile-only. When you sign up, you don’t go to a branch. You tap. And you’re done.
If a million customers decided to join DBS Digibank today, at the same exact time, it would take them a grand total of 90 seconds to become customers.
Let that sink in… it stings, doesn’t it? How long does it take your bank to onboard a million customers? More than 90 seconds? Try 90 months. You’re toast.
If their Digibank experiment works in India, do you think that’s the end of the story? Think again. In fact, it’s an extremely savvy insurance policy against disruption. If things go all Über, they’ll be right there, positioned to benefit. Positioned to remain relevant. Positioned to stay alive.
If you wait, Telefonica will teach you a hard lesson
The onslaught is already under way. In cubicles around the world, developers are hatching their evil plans to launch digital banks. They didn’t ask your permission. They don’t sit on your committees. They don’t work for you. They don’t work for your competitors. They work for startups, telcos, eCommerce giants, chat apps, you name it.
They’re going to make you look like a taxi company. What are you going to do about it?