Banks and technology giants are locked in a battle to provide the best customer experience, though financial services firms often have the advantage of a better technological foundation.
Speaking this week during a bobsguide webinar, Scott Abrahams, senior vice president of business development at Mastercard UK, said while technology giants are partnering with financial service firms, the balance could tip towards full disruption in the future.
“What is interesting is that a lot of these customer experience plays are sitting on what is traditional plumbing. As a payments brand our greatest asset is the fact that you can use a Mastercard product in 45m places around the world. That’s hard to replicate and so a lot of the Bigtech firms at this time are more interested in disrupting via partnership.
“Things will change when these firms decide to move from partnerships to full on disruption. I’m not naïve enough to say that day won’t come, it could very well happen. There are margins to be made for a start and data to be gathered. A lot of the discussions when Apple Pay was first introduced wasn’t so much the user experience or the acceptance but about the ownership of the data.”
Also on the panel was David Jones, vice president of product evangelism at Nuxeo. “It’s also about speed of delivery,” he said. “We live in the ‘we want it now’ generation and it can be a bit of an unfair comparison when you look at the instant download of a TV show versus an application for a mortgage but a lot of the newer fintech organizations are reducing processing times for new loans and account openings, trying to service this new generation. That’s something that the bigtech firms do very well and again something that finserv has not done very well.”
A poll conducted during the webinar found 48% of attendants considered Amazon to be the biggest threat to the financial services sector. 25% also believed Chinese firm Alibaba would make its mark.
“I think a lot of this is down to the pervasiveness and the breadth of markets that Amazon is getting into at the moment,” said Jones. “I’m very surprised about the lack of votes for Apple, I think it is making really strong strides into financial services.”
Abrahams was also surprised by the lack of votes for Apple. “Certainly, working at Mastercard, and how much work we’ve done with Apple on Apple Pay and how they’re using our network to launch the Apple Card [the lack of votes for Apple] is surprising. It’s interesting that Alipay and Tencent – not that we should put them together – have got a share of the votes.
“I voted for Tencent in the poll and the reason for that is just basically because I spent three months in China last year and didn’t use cash once in three months. Not once. It’s incredible considering that even two or three years ago in China no one would leave home without a few RMB in their pockets. I bought a kilogram of mandarins from somebody and I paid using WeChat.”
To hear more from Jones and Abrahams, watch the full webinar on demand, here: 5 strategies to help financial services face the Bigtech threat