A senior Ovum analyst has offered an alternate ending to the ‘own the customer’ banking discourse, stating that banks should concentrate more on increasing transactions and less on where and how these transactions occur.
Speaking with OmniChannel Media in reference to the recent separation of ecommerce juggernaut eBay and its payments subsidiary Paypal, Ovum Analyst Gilles Ubaghs stated that banks should not be worried about the increasing presence of Paypal:
‘It really comes down to how much a bank wants to give up in terms of branding and “control of the customer”,’ he said. ‘I personally think banks need to be focusing on driving transaction growth.’
‘If you are a bank and you can get your card to be used as the primary card for within a Paypal wallet that is good for you. This is opposed to fighting against it tooth and claw just to drive this notion of ‘owning the customer.’
Gilles believes this strategy may become commonplace for Australia’s big banks. Given the amount of choice customers now have, and their willingness to move around, Australia’s banks should be embracing front-end portals:
‘Consumers these days just jump around to whatever works. If you look at some of the big banks in the US, like Bank of America and Citigroup, they are kind of taking a ‘lets do everything’ strategy, whatever works best for the customer.’
The payments space is proving to be a hot-bed for innovation and disruption. With the likes of Paypal now being seen as an incumbent player, the time appears right for banks to let go of the customer and move towards a more collaborative model.
Not only would this service the market in a more efficient way, it will limit the amount of investment that banks devote on large-scale customer facing products. With Apple Pay set to hit our shores soon, and the local banks toeing the water of NFC, only time will tell what kind of approach the banks will make.
One thing is for certain though; driving customers towards digital is the key to ensuring a profitable banking business in 2015:
‘There major motivation is to get everyone away from paper,’ Gilles concluded.
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