It’s no coincidence that on the heels of LendingClub's 9bn IPO, the impact of disruptive technology and business models such as P2P lending was a hot theme at Nomis Forum. Alternative finance scholar Dr Richard Swart, Nomis CEO Frank Rhode, and Nomis founder Dr Robert Phillips all shared their unique perspectives, and the discussions continued among the attendees during breaks and open sessions.
The Lending Club IPO validates alternative lending, as does a large flow of offshore money into these business models. These new entrants, stripped of other banking responsibilities, skirting regulations, and built on new technology, are nimble and clearly have the potential to take chunks of traditional banking business.
What are banks to do?
The response by traditional banks starts with the realization that they still hold a majority of the ground in terms of customer base and resources. But that customer base will not be patient for long, so just as disrupters leverage technology in their attacks, so too banks must use technology to defend their turf.
Where to start
Price optimization technology is a key weapon that is available today. It applies cutting-edge advanced analytics and big-data technologies, but is market-proven to deliver results. And unlike disruptions like P2P, pricing technology is available today—from Nomis—and it doesn’t require a huge cultural shift nor a massive internal development effort.
If the attendees who attended Nomis Forum 2015 last week are any indication, traditional banks are open to changing their cultures to embrace new technology much faster than in the past. The first step to the future is often taken by partnering with companies like Nomis.