Most Banks Capable of Coping with Technological Challenges: Augusto Beato

Portland SEO's Augusto Beato maintains that it remains to be seen whether or not most traditional banks will go out of business in 12 years due to technological advancements.

Beato was reacting to Gartner’s 2018 CEO survey, which indicates that nearly 80 percent of heritage financial services firms globally will close down by 2030.

"While its true that banks risk losing business with their 20th-century business and operating models, a lot of them are capable of transforming their operations digitally," Beato pointed out.

Beato added that in another survey conducted by Fiser, more than half of respondents reported visiting a physical branch in the month before the survey. That figure increases to 80 percent in a six-month period.

The most common reasons for visiting a branch include depositing checks (61 percent) or cash (40 percent) and withdrawing cash (44 percent).

"It is notable that none of these transactions requires a branch visit," avers Beato.

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According to the Gartner survey, heritage financial services firms will struggle for relevance as global digital platforms, fintech companies and other non-traditional players gain greater market share, using technology to change the economics and business models of the industry, said the market research firm.

David Furlonger, Vice President and Distinguished Analyst at Gartner, pointed out that established financial services providers will have to move faster on digital business by building digital platforms or finding niche products and services to sell on others’ platforms.

On the other hand, the survey conducted by Fiserv revealed that a looming competitive threat against banks comes in the form of technology companies and other non-banks increasingly providing bank-like services.

This year, 55 percent of respondents said in Fiserv’s quarterly consumer trends they would be “comfortable” using a technology company to pay bills. That was a big increase from the 40 percent gathered in a 2017 survey.

Furthermore, 39 percent would consider a tech company for a loan, 43 percent for money management, 54 percent for budget tracking, and 52 percent for transferring money to others.