The 21st annual International Payments Summit held in London, commenced Tuesday April 9. Over 400 senior level executives from around the world have congregated in the capital city to discuss and learn about important issues in the payments and banking industry. The IPS 2013 has gathered over 140 speakers with reputable expertise in transaction banking and new payment services, and who offer plenty of insight on their corporate customers.
One of the speakers presenting at Tuesday’s event was Brett King, a best-selling author of Banking 2.0 and founder of Moven, a mobile digital wallet business. King discussed how modern advances in digital technologies such as the Internet and mobile smartphones will eventually lead to the irrelevance of retail banks. King predicted that there would be no need for retail banking models if digitized banking were to completely replace physical products, equating the evolving banking industry with their music and publishing counterparts.
“In the old days there was a physical product, and a physical store,” King stated at the summit. “Then with the arrival of the Internet, you could by the physical product, such as a book or an album, in a digital store- think Amazon or eBay. Consumer behavior started to shift, and very rapidly business models that had been profitable went out of business. Banking is no different,” King said, according to Banking Technology.
King insisted that while the music and book industry had already endured the pivotal shift, banking was just laying on the cusp. He reminded the audience that consumer behavior is not to be controlled or repelled, as he used the legal battle with music sharing site Napster.
King continued, “The Recording Industry Association of America spent hundred of millions trying to stop changing consumer behavior and failed.”
Using statistic to further advocate his point, King explained that in 1995, the average European consumer would make a bank visit 2.21 times per month. In the year 2012 this figure dropped to 0.26 visits, indicating consumers were only going to the bank 3.2 times per year. Not only did King remind finance professionals to heed new consumer behaviors as major warning signs, but also noted the recent job cuts from the world’s largest financial institutions. According to King, banks such as Bank of America, Barclays and JP Morgan Chase, who have been making drastic cuts in staff, should be considered as signs of significant changes to come.
“By 2016, the average user of banking services will be using digital services 300 times for every physical interaction with their bank,” King said.
To read more of King’s quotes, read the entire Banking Technology article here.
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