The pandemic has seen an unprecedented move to online banking, with banks likely to ‘sell’ online products in the future, much as Amazon does
As Spaniards endured one of Europe’s most stringent pandemic lockdowns, Banco Santander’s digital-only Openbank did roaring business. Its brokerage client base expanded 58% in the first four months of the year and trading in shares, exchange-traded funds and warrants on its platform more than doubled.
Businesses reviewing post-coronavirus strategies are finding that online activity — from shopping and gaming to banking and social networking — that was shaking up their worlds even before the pandemic, has flourished. For retail banking, a survey by McKinsey from mid-April found a jump of as much as 20% in digital-channel use across Europe. More than one in five customers in Spain and Britain tried online banking for the first time.That’s giving a new impetus to banks’ online push.
“It’s the only way they’ll remain competitive,” said Antony Jenkins, who was the CEO of Barclays Bank between 2012 and 2015 and is now chair and founder of 10x Future Technologies. “They’re already under pressure because return on equity is poor. They have to compete with fintech and big tech. They need to get more agile, get these functionalities onto the market quicker.
Santander’s peers are adopting similar strategies. In the UK, Royal Bank of Scotland Group is working on digital business platform Mettle. Nationwide Building Society is working with 10x while Lloyds Banking Group is doing something similar with cloud-native, digital platform provider Thought Machine. Goldman Sachs Group started Marcus by Goldman Sachs in Britain after launching it at home.Digital metamorphoses may be easier said than done.
Bank websites will become more like online marketplaces selling financial products — both their own and those of others.
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