Digital disruption of the banking industry: Threat or opportunity?

Abstract

If the previous decade in the banking business was marked by excessive credit expansion, today we are talking about a decade of its digital transformation. Under the influence of digital media and tremendous changes in technology and consumer needs, banks are exposed to digital disruption of their business models both from the inside and outside, which all leads to innovations in products, services, sales and distribution channels, business models and ultimately organizational culture. Sector analyses are showing that future profits will be redirected towards those financial organizations which successfully deploy digital technologies for process automation and as analytical tools, create new services and values for their clients who want their bank to be accessible at all places and all times, and which transform their organizational culture to an agile and innovation-oriented one. Successful banking strategies will be based on understanding how digital business transformation can create new value - on market changes brought by fin-tech innovators, on comprehensive understanding of customer habits and expectations, and setting up investments into digital business as the key priority.

Keywords

• banking sector
• banks
• digital disruption
• online business
• fin-tech