A bank is a financial institution which deals with money and credit. Banks differ from other financial institutions and are considered to be a business organization which provides fundamental banking facilities to customers. Banks are a representation of a country’s financial stability. They play an important role in a country’s economy and are a major part of a country’s financial system.
The business of retail banking is based on receiving deposits from customers, making advances of money and moving money from one place to another. In order to make advances of their money, banks promote and mobilize customer savings. The products and services of retail banks are not limited to cash deposits and loans. With the increase in technology, banks …show more content…
Such companies are providing alternatives to banking and are invariably increasing competition in the banking industry. This could be a major risk for the retail banking sector and in order to retain their position in the market, banks need to come up with their own innovative products. A number of banks have recently developed “phone based apps” in order to provide services for their customers which are similar to Google Wallet or Apple Pay. However, by developing similar methods of payment, banks are still at risk because they cannot compete with the enormous customer base of such large companies. The underlying problem for banks is that they can only provide banking products to their customers and improve those products with technological innovation. This is not the case however for companies like Apple and Google. They are introducing banking products as an “add on” to their original products to advertise and boost their sales. For example, Apple has launched Apple Pay to increase their customer base and have more people buying their phones. Similarly, Google introduced Google Wallet to get customer information. (Firth. E)
Technological innovation can have a major impact on the banking industry both in the UK and globally. The retail banking sector all over the world is dominated by larger companies who are major players in the market. The reason behind this is that the banking …show more content…
This report addressed risks regarding fraud and security as well as risks involving the failure of IT systems. It encouraged customers to understand and become familiar with mobile banking before using the service. Banks were to develop anti money laundering systems in order to prevent losses. Ultimately, the report’s focus was customer protection. Adamson summed up his speech by saying that the FCA recognizes all challenges faced by retail banks and is willing to play its part with the industry to achieve an efficient market (Adamson. C). The creation of Payments System Regulator in the UK (2013) to oversee the competition in payment industries also proves that financial regulators prioritize this issue (Mariotto. C, Verdier.M)
While innovation in the banking industry increases competition for banks, large companies are still very much dependent on banks for the tools that they provide. Banks are the backbone of payment infrastructure and are incumbent financial institutions. Without the access to customer accounts, large companies like Apple and Google cannot provide their payment services. The measure of the impact of innovation on banks cannot fully be determined until market share increases. Banks should however carry out a tactical approach and launch new products in order to leap ahead of its
The business of retail banking is based on receiving deposits from customers, making advances of money and moving money from one place to another. In order to make advances of their money, banks promote and mobilize customer savings. The products and services of retail banks are not limited to cash deposits and loans. With the increase in technology, banks …show more content…
Such companies are providing alternatives to banking and are invariably increasing competition in the banking industry. This could be a major risk for the retail banking sector and in order to retain their position in the market, banks need to come up with their own innovative products. A number of banks have recently developed “phone based apps” in order to provide services for their customers which are similar to Google Wallet or Apple Pay. However, by developing similar methods of payment, banks are still at risk because they cannot compete with the enormous customer base of such large companies. The underlying problem for banks is that they can only provide banking products to their customers and improve those products with technological innovation. This is not the case however for companies like Apple and Google. They are introducing banking products as an “add on” to their original products to advertise and boost their sales. For example, Apple has launched Apple Pay to increase their customer base and have more people buying their phones. Similarly, Google introduced Google Wallet to get customer information. (Firth. E)
Technological innovation can have a major impact on the banking industry both in the UK and globally. The retail banking sector all over the world is dominated by larger companies who are major players in the market. The reason behind this is that the banking …show more content…
This report addressed risks regarding fraud and security as well as risks involving the failure of IT systems. It encouraged customers to understand and become familiar with mobile banking before using the service. Banks were to develop anti money laundering systems in order to prevent losses. Ultimately, the report’s focus was customer protection. Adamson summed up his speech by saying that the FCA recognizes all challenges faced by retail banks and is willing to play its part with the industry to achieve an efficient market (Adamson. C). The creation of Payments System Regulator in the UK (2013) to oversee the competition in payment industries also proves that financial regulators prioritize this issue (Mariotto. C, Verdier.M)
While innovation in the banking industry increases competition for banks, large companies are still very much dependent on banks for the tools that they provide. Banks are the backbone of payment infrastructure and are incumbent financial institutions. Without the access to customer accounts, large companies like Apple and Google cannot provide their payment services. The measure of the impact of innovation on banks cannot fully be determined until market share increases. Banks should however carry out a tactical approach and launch new products in order to leap ahead of its