Forrester Vice President and Research Director Benjamin Ensor discusses the uncertain future of banks — and the outside players threatening banks’ relationship with customers.
Benjamin Ensor, Vice President, Research Director
Banks have been the bedrock of the world’s economy. Through economic ups and downs, the role and business model of the bank has been a constant. It is hard to conceive how any economic dynamic, no matter how significant, would shake that foundation.
Yet that foundation is facing unprecedented risk — not from economic forces but from the powerful combination of customers and innovation.
The “customer-for-a-lifetime” business model was stable and powerful, but today’s consumers are different. They show little loyalty to banks and are benefitting from banks tearing down switch costs. They are more likely to test and use offerings from new entrants like Venmo, and social behemoths like WeChat and Alibaba that leverage digital to create new and easy experiences
Left unaddressed, banks risk becoming “the pipes” in the background. Disintermediation is easier when consumers have lost a sense of loyalty and operate as adventurous free agents.
In this episode, Benjamin Ensor urges banks to act now — to think differently about how they can create value for customers, to use the unique and powerful data that they have in-house, and to think of digital platforms and experiences as an engine for growth.