Published on : Nov 09, 2015
Mobile banking is rapidly changing the landscape of the banking industry in the United States. Old-style banking by industry giants such as Chase and Citi is fast fading with the introduction of mobile banking by smaller banks. The smaller established banks are partnering with modest technology start-ups from Silicon Valley and are offering high speed-solutions covering mobile checking, lending services, savings account, and credit cards. Industry analysts have pointed out that if the big banks continue to ignore mobile banking, it would lead to their losses.
According to Anthony Marshall, research director and strategy leader at the IBM Institute for Business Value, the biggest global banks are facing challenge to stay ahead technologically. However, these big banks are apprehensive in taking new decisions to upgrade their technology. A recent IBM banking study has highlighted the smaller banks such as TD Bank among the emerging group of smaller banks upgrading their banking technology. TD Bank has invested in a large-scale social tech upgrade that has lead to beneficial results. For example, some of the business units of the bank have witnessed significant reduction in e-mail usage with employees engaging across new social networks such as wikis and blogs. Canada’s Tangerine Bank is another smaller bank included in the IBM study that has invested in labour-saving customer mobile services.
With smaller banks threatening the position of the big players, the larger global banks need to change their archaic platforms. The period, during which the big banks make their transition to mobile banking platforms, the smaller banks might gain a larger share in the market. Analysts have stated that with new technology platforms and customer loyalty being fickle, old-fashioned banking models will be obsolete sooner than expected. According to Paul Merski, chief economist at the Independent Community Bankers of America, the time is exciting for smaller banks to compete with the major-league banks.