The banking industry, like any other service industry, focuses on the delivery of efficient services to customers at the lowest cost possible. There are innumerable banking institutions in the UK in addition to other finance institutions. Each of them is keen on outdoing the rest in order to maintain its market share and for the new entrants, to hive a share of the market. It is against this background that the banks are expected to take the measures discussed below:
1) Increased use of technology
According to a research carried out by PwC, technology and innovation are imperative to banks and other financial institutions. Indeed, if the evolution in technology in the past few years is anything to go by, then the players in banking industry must be ready to integrate technology in their day to day activities. The rapid evolution of technology is evidenced by, among others, the use of smartphones, big data and cloud computing. Mobile and internet banking are commonplace today. It is predicted that more and more banks will leverage on technology to minimize costs and maximise profits. Further, the current generation of young people is well versed with the use of technology and would be more inclined to banks that incorporate technology in their services.
2) Use of social media as the main avenue of marketing
Social media including Facebook, Twitter, and LinkedIn are increasingly becoming part and parcel of life. A study of the UK social media usage in 2017 revealed that there are currently over 32 million Facebook users, 21 million LinkedIn users, 19 million Instagram users and over 14 million active users of Instagram. Demographically, most of these users are between the age of 20-29 years. Banks will, therefore, seek to use social media more and more so as to reach this important segment of the market.
3) Diminished significance of branches
For a long time, the competitive reach of a bank has been determined by its branch network. It is predicted that this will change and the shift will be on technology and marketing budgets. This is premised on the thesis that where all aspects of banking can be done digitally, then bank branches may be of little use in determining the market share of a banking institution. In fact, many banks have reduced the number of tellers in most of their branches as focus shifts to technology.
4) Focus on cyber security
With increased use of technology in the banking industry, institutions and governments will need to invest in cyber security. Neglecting the area would expose consumers to considerable risks. It would also erode consumer confidence negating the advantages that would be anticipated from the increased use of technology.
5) Focus on customers as opposed to products
It is predicted that banks will increasingly focus on seamless customer experience. Sales and services will be integrated across all channels. All this will be tailored towards ensuring that customers see banks as meeting their needs as opposed to pushing products.
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