Nomis Forum 2015 came to an end last week, closing two days of insight, education, and candid debate between and among leading bankers from six countries, outside experts from business and academia, and Nomis experts from all disciplines of price optimization for retail banking.
The speakers addressed the existential challenges that traditional banks are facing, and they provided alternative views of the future of traditional banking. There were three major themes:
Understand and embrace disruption
Guest keynote speaker and Alternative Finance Scholar, Dr Richard Swart highlighted how disruptive technology such as P2P lending now has the attention of big money, and therefore how its influence and ability to disrupt will only grow. Banks need to embrace disruptors and adapt accordingly. Innovation is key, and in order to attract millennial customers, banks must be seen as innovators. Nomis founder Dr Robert Phillips contributed an academic analysis, showing how past disruptions occurred and how even though alt fi barely registers a blip of volume, that can change very quickly.
Data is the driver of this disruption, embrace that as well
Data is king, and as Aaron Fine of Oliver Wyman discussed, digital is a means of accessing this data and said data will be a bank’s means of awareness. This is awareness of what the customer wants, an awareness of their profit source, and an awareness of inefficiencies.
Applying data is the way to answer this disruption
Effective data management allows a bank to more deeply understand customers and their decision drivers. Damian Young, Nomis VP of Banking EMEA, showed how banks can use data to prepare for rising interest rates and the impact of new regulation, such as Basel III.
Clearly, customer segmentation, analytics, and pricing are a powerful weapon in the era of digital banking, and especially as banks defend territory that is under attack from alternative financial service providers. Disruption is here to stay, but it need not be a net negative for banks. By embracing new banking models and technology, and by adopting tools like advanced data analytics and pricing, banks can remain relevant and profitable. Nomis Forum 2015 helped to point the way for banks. Now they need to stay the course.