Professor Catherine Karyotis from NEOMA Business School states that, banks need to develop new strategies in order to compete the developing market with new challenges from the new players born from digital transformation, who are causing a gradual loss in banks monopoly. There have been many upheavals within the banking community that needs drastic transformations such as introduction of open banking systems, payment automation, instant payments and other developments in the technology.
Neobanks are firms with financial technology that offers internet only services. They have no physical branches. Consumers who don’t mind using mobile app for money management mostly rely upon these. These Neobanks are now becoming one of the biggest competitors for traditional banks. Professor Karyotis says that traditional banks must adapt in order to stand out and capitalise on the trusted relationships that have been established between them and their customers, in order to compete with these exclusively operating direct banks.
She also adds that, a new type of customer relationship needs to be established and in order to improve customer experience, the sources of value creation need to be revised. The she states that, to be customer centric is to put the customer and not the product offer, at the centre of the company’s concerns. In order to have the edge on these digital players, the banks must focus more on their customers by offering an added value to them. The traditional bank employees must capitalize their social skills to accomplish a good place for their banks as their appeal is disappearing nowadays. These banks need to reinvent themselves and make innovations to their economic models, or partnership with the new entrants to emphasize their skills and knowledge that are built on trust.