In recent years, much has been said about the way the likes of Amazon and Facebook could potentially threaten the status quo of financial services giants by taking what they know about you and pushing protection or mortgage deals.
This week I read MoneyLive's report on The Future of Retail Banking.
Nobody knows you as well as your bank does.
They can see if you stick with the same gas and electricity provider for years rather than switch to a cheaper supplier, or if you've spent £20 a week on takeaway for the past 10 years and as a result have no savings to use to purchase your own home.
This report makes you realise while Amazon knows what you like to blow your pay packet on, Netflix knows what shows float your boat and Facebook knows the fake face you like to show passing "friends", your bank account can see what keeps you – plus your family – going in all areas of life.
In the report, Juliet Knight, director of Marketforce, writes: "Banks are aware they need to change.
"We find an industry not only alert to the possibilities of chatbots, robotic processing automation, artificial intelligence and voice-assistants, but also planning fundamental business model innovation in the next five years as banks launch marketplaces and anticipate generating revenues from non-financial services, as they seek to emulate the industry-blurring success of the biggest platform businesses.
"This is encouraging, yet there is still much work to be done if banks are to keep pace with changing customer behaviours. Failure to act could see banks lose that all important customer relationship and find themselves increasingly irrelevant in a world designed to satisfy the customer’s desire for convenience.
"Our report makes it very clear: the time to act is now."
The report, which is based on a survey of more than 600 senior figures from across the banking sector in October 2018, revealed existing banks are set to leverage next-generation technologies to transform their operations.
In the report, Simon Thompson, chief executive of Chartered Banker Institute, writes: "It is a time of great challenge and also great opportunity; banks now have the tools to reconfigure the banking value chain and make a real difference to the financial health of their customers."
But if banks really want to challenge giants like Facebook and Amazon, then they should remember that the success of these companies isn't just down to technology.
Trust is key – which makes now a great time to strike for the banks, as people have started questioning how their data is used by Facebook and why Amazon ads pop up everywhere.
If banks really want to regain trust and sweep up here, they must realise that after the payment protection insurance mis-selling scandal, what they do next can't be about pushing product.
It must be about holistic financial planning – and calling upon the expertise of the highly skilled human advisers out there, and not just relying on algorithms of flashy apps is key to making the likes of Amazon and Facebook chiefs view them as a serious threat.
emma.hughes@ft.com
