I have written a few articles recently about how large internet companies like Google, Facebook and Twitter could be the biggest threat to retail banks for many of their services.
Why shouldn’t a massive internet firms offer a current account for example? They have the technology and the customer trust. They already hold lots of customer details. Retail banks like RBS, lumbered with legacy IT, might end up being just B2B, leaving internet firms to offer retail banking services.
A good contact of mine in the banking sector believes major change is on the horizon.
He said: “I think Amazon, Ebay and Paypal will become banks soon.”
“The dinosaur banks won’t be around in 10 years except for business to business products. Cost base too high and service level too low combined with poor reputations and pressure from regulators, governments, public and media. The writing is on the wall, extinction is inevitable, but they are in denial at the moment.”