Archives

Where and how will banks make money in the new financial world?

Jim Woodworth

Head of Business Services

Monday, June 8, 2009

Few banks have emerged from the recent crisis unscathed, and many are coming to the conclusion that the road to recovery and future success lies in going back to basics. This involves banks returning to their roots, which essentially means payments – indeed The Boston Consulting Group’s report “Weathering the Storm” in March 2009 says that global payments revenues hit $805.1 billion in 2008, up from $654.3 billion in 2006. Yet, making money out of payments for banks is not an easy task. Revenue per transaction is decreasing while costs are increasing, primarily due to rules and regulations.

A possible solution lies in the use of innovative technologies aimed to encourage existing customers to make more payments, more often. New technologies in the payments space have emerged over recent years, such as contactless and mobile payments, but they could be embraced more widely. In the UK, the Barclaycard OnePulse card has been the spearheaded of contactless technology for payments, and the currently unique nature of its product has attracted new customers from the ten million Oyster card holders in London and thereby increased its payment volumes.

Mobile banking and payments services are another area for investment by banks hoping to use the latest technologies to increase transaction volumes. Forward-looking banks are considering how they can work with the other industry players to iron out the challenges associated with mobile payments so they can satisfy consumer appetite for using a single device to conduct every aspect of their life. As well as enhancing customer service, mobile payments should also lead to enhanced payment volumes.

As banks introduce new technologies to ultimately increase revenue, they are also considering what they can do to automate previously manual processes in order to reduce costs. Back-end functionality such as SMS alerting used for fraud analysis is one example, as well as creating an environment where customers are comfortable with a much more ‘automated’ relationship with their bank, so that they have the potential to deliver even more significant efficiency savings.

Arguably, banks have not been at the cutting-edge of technology adoption in years gone by. However, while the current downturn may not provide an ideal environment for technology investment, it could hold the key to the banks’ present challenges; namely: driving efficiency savings, encouraging customers to make more payments and regaining customer confidence through better consumer-centric services.

Jim Woodworth
Head of Business Services

Contact us

Add your comment

Comments

  • Agus
    Tuesday, October 29, 2013

    Your chances of being arpeovpd for a short sale are slim if you are current on mortgage payments. The lender isn't going to approve a short sale just because your home has lost value. The lender will insist on some sort of financial basis disclosure from you before considering allowing a short sale. If you have other sizeable personal assets, they won't approve you, and will expect you to pay off the deficiency. Of course, you can cease making payments and head for foreclosure, and that will raise havoc with your credit rating. Unfortunately, so will a short sale.In the event of a foreclosure or short sale, you can expect to be denied future mortgages for a period of from three to five years.