Key findings in a recent report by David Furlonger, managing vice president for Gartner’s Financial Services research team:

• The consumerisation of IT is transferring control of payment mechanisms away from banks.
• The invention of electronic forms of money is transferring control of money as a store of value and unit of account from banks to individual entities.

It is a provocative thesis, and one occasionally proposed by Chris Skinner in London, who sees PayPal and internet lending as real threats to banks.

Important drivers, Furlonger says:

• Technology Advancements - Computing power is changing the way money is dealt with. IT itself is also being consumerized — there is increasing business use of consumer-grade technology and focus on introducing new technologies into consumer markets prior to industrial markets.
• Globalisation - Geographical boundaries have faded. The requirement for more fluidity in the payment mechanisms and a form of money to accommodate cross-border transactions is growing. Moreover, the one-size-fits-all financial services provider model does not suit multivariant buyer demographics that are now accessible and accessing global markets. Emerging markets are opening, and the world’s poor are increasingly finding ways to enter the global economy via microfinance and other means.
• Convenience - Customer satisfaction defines a company’s capability to survive. Exposure to quality services, knowledge of trends and access to information have made consumers more demanding.

But banks will have to keep serving traditional customers while finding ways to work in the new digital arena as well.

Filed under: Technology