A new model of survival has been put forward for the traditional banks who are in the midst of a tense standoff with industry disruptors. Disruption, the latest book from business publisher LID, explores the future of banking in a market where the rules have fundamentally changed.
The book, authored by Ignacio Garcia Alves, Philippe de Backer and Juan Gonzalez of management consulting firm Arthur D. Little, outlines the challenges that traditional banks face from new competitors and puts forward a new model for change and survival.
In addition to the authors’ own experience, Disruption leverages insight into the industry through the words of prominent banking figures, who openly communicate their honest views regarding the future of a sector that’s moving at rapid speed.
Dr. Bernd van Linder, CEO, Commercial Bank of Dubai, said: “I think the future will be one of partnerships and will be one of a hybrid model, in more than one way. So, we will see a multiple of hybrid models, between digital and physical banking, and between proprietary and partnership banking.”
The book provides a critical understanding of the trends that are happening within the industry right now, including the impact of the Covid-19 pandemic, the growing shift to digital and the emergence of new ways of handling your money.
“We can only conclude from our research and analysis that the traditional banking model we’ve all grown up with is no longer fit for purpose,” comments co-author de Backer. “The rules of the game have changed so fundamentally that banks have no option but to adopt a different model, one that’s much better suited to the world as we now know it. However, this requires both significant investment and a major shift in banking culture.”
Crucially, the book identifies key opportunities for universal banks to leverage their unique assets and pre-empt new entrants from dominating the market.
“Disruption details how a new breed of more agile and aggressive players is disrupting the financial services sector and advises how traditional banks can deal with the serious challenges they face from these disruptors,” comments co-author Garcia Alves.
“It’s a ‘thinking tool’ designed to stimulate action that we hope will particularly resonate with those in the sector who already have a strong sense that banking has fundamentally changed, with its legacy model facing an existential threat.
“On saying that, it’s not our intention to be alarmist. Instead, we want readers to reflect on what these changes mean for the industry in terms of both risks and opportunities.”
Gonzalez adds: “The arrival of disruptive, technology-empowered players in the financial market should be a wake-up call to banks, because if they’re to survive the threat they need to move quickly. Banks are conservative organisations that tend to move slowly, but we hope that Disruption will help them to understand the changes that are coming and to ultimately adapt more quickly.”
Disruption is a must-read for anyone who wants an in-depth analysis of the current state of the banking market and where it’s heading in the future. It’s a book for financial services executives who want to be ahead of the curve and make the right decisions to enable their business to thrive rather than stagnate.
