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The upgrade in technology has upended the processes and workflow of the banking services industry. The tasks that were previously done by paperwork, human interaction and large computers are now done on digital interfaces (Bounie & Gaze, 2011 p.215). The pervasive financial services today around the world are now done in the fine-tech startup opportunities to make work easier. Every type of economic activity in this case from wealth management and banking to payments are today managed by the advancement of technology (Bounie & Gaze, 2011 p.219). The old way of solving puzzles in the investment is all done in the promotion of technology and the rise of the digital error. In this essay, we will elaborate on the impact of technology on the retail banking industry.
The Mobile Banking
As the electronic and mobile technology changes, it has reduced the need for having bank branches around the world because more customers now use this type of services (Nicoletti, 2014 p.127). Before this advancement people used to go to the banks and meet the teller for services. Usually, the job never required any qualifications past the college degree. However, in today's world, the roles of tellers have been redefined. For the last five years. Banking sectors are accelerating to reduce the queues made in the halls by rolling out the online, app-based and mobile banking services. This has reduced the traffic of customer to about 25 percent.
According to research, many people still open new accounts and most of them as well change the banks frequently because of competition. The study also discovered that the increasing number of banks reports also have more online money transactions (Nicoletti, 2014 p.132). Banks have also opted to go with mobile banking to save the operating cost where large chunks of money can be collected and used for other purposes. They do this by creating automated kiosks that have an array function like helping the customers with processing and information (Nicoletti, 2014 p.138).
Today the use of mobile banking not only does it benefit the customer but has also become necessary when it comes to the bank-customer relationship. If these services become unavailable to the customers, then they always have an option to move to another financial institution. Since the beginning of the banking apps, Samsung, Android, Walmart, and Apple developed their mobile wallets to simplify the services of customers through their smartphones (Nicoletti, 2014 p.144). Based on a survey done in 2012 by BI Intelligence, they discovered that more than 27% of customer used their mobiles to check out on their banks or store at least three times per week (Singh, 2010 p. 295). In other words, smartphones are now the base of mobile banking particularly for young clients because of the financial influence that encourages them. The BI intelligence also released a data to elaborate more on mobile banking, and the results showed that 71% find it essential having the banking app because it makes their way of payment faster and more comfortable (Singh, 2010 p. 301). Fifty-one percent, on the other hand, have been using the application to purchase items online while 27% claimed that they use the app to pay for their issues to the stores (Singh, 2010 p. 309).
The Changing Role of Banking
In the retail banking sector, the face-to-face has always been the hallmark of excellent services. Most people, in this case, enjoyed going to their neighborhood branches just to be given the same excellent service (Finel-Honigman, 2004 p. 305). However, today's banking industry has changed their focus and opted to go to the online services. More banks have also chosen to reduce their costs as they find the face-to-face services more expensive to maintain. A survey done in 2012 showed that more than two thousand branches of the SNL financial institution shut the banks to connect with the advancement of technology (Finel-Honigman, 2004 p. 308).
However, several banks have still maintained the face-to-face services because of the old-aged customers and customers that still live in poverty since they are unable to access the new technologies. While the ATMs still exist, many people still prefer the old way of going to the teller for services (Haring & Mattson, 2013 p. 29). In the U.S, a large number of banks have advanced their ATMs with the video teller assistance technology. The advancement of this technology enables the users to receive personal assistance through video conferencing instead of going to the bank tellers for services. Moreover, more benefits that are also attained include the flexibility of where, when and how to the banks as well as the access to other services during the odd hours (Haring & Mattson, 2013 p. 38).
Peer to Peer Banking Services
The retail banking sector is one of the most prominent and fastest services because of the use of digital technology to provide quick and best service to their customers. They also make sure that maintain their banking infrastructure due to the change in technology. Banks that use the traditional way of operation face severe threats because of the emergence of the preferable and newer modes of bank services (Mowbray et al., 2015 p. 366). In today's banking sector, the peer-to-peer is now forced to reckon with the change. The debt financing method, for instance, is one method that is used by peer-to-peer to borrow and lend money or any other services that may require any financial or bank as an intermediary. This model is also different from traditional banking because they act as a platform for connecting the investors with the loan seekers. Therefore the peer-to-peer method benefits from the earnings of the originated fees because they do not grant their funds(Mowbray et al., 2015 p. 371). Usually, the borrowers pay a small fee known as an interest rate where the investors use them as a service fee to fund the peer-to-peer service model.
The majority of the P2P services offer partial and whole loan purchases to maintain the retail and institutional investors. Most of them provide the automated loan services which allow the investor to develop criteria of how the loan will be purchased. The system usually filters the credits quickly to enable the investor to use them respectively (Mowbray et al., 2015 p. 369). This type of system also gives the investor the types of loans that can be offered to the borrower. Globally, more regulatory authorities are now using the peer-to-peer services. Suitable examples of countries that use this service include the FCA in the UK by developing a framework that gives extra protection to the customers, offer competition, ensure that correct information is provided and also minimizes the customers complains (Mowbray et al., 2015 p. 384).
The UK financial products and service providers
In the UK, a small number of people that still use the financial market compared to today's services is low. For instance, a survey conducted by Eurobarometer discovered that only twenty-two percent owned the bonds or stock (Cannon, 2001 p. 145). Most investors, in this case, changed their direction and began seeking advises form wealth managers, banks, financial advisory firms and employee benefits consultants. For instance, the financial advice firms contribute to the most significant share with over 21,000 advisers to the financial advice market (Cannon, 2001 p. 145). In this case, two types of financial advisers exist in the UK: Restricted and independent advisors. The role of the restricted advisors is only to recommend specific products, and the product providers, while the Independent advisors consider or approve the local investments products by giving unrestricted and unbiased advice to the market (Cannon, 2001 p. 155).
The impact of marketplace change on the consumers and providers
The ubiquity of the social network apps and smartphones has changed the way today's families and friends reach out to each other. For instance, the e-commerce and Amazon sites have revolutionized the way people shop. The digital technology has also influenced the healthcare sectors on how they would take care of their customers through the services (Mahon, 2012 p. 42). Most customers, in this case, have gadgets that keep track of their health data such as dieting and physical activities. Many of them also use the wearable tech gadgets to assist them to reduce stress, eat better and retain a healthier lifestyle. Mobile shopping and e-commerce have also been pushed by the digital transformation to mainstream all their products. Since digital shopping has now become familiar, companies have also changed the way of supplying to enhance superior shopping experience (Mahon, 2012 p. 52). The customers, on the other hand, have also adjusted their way of living by purchasing gadgets that have feature connected to such services.
Bounie, D., & Gaze, P. (2011). How do Internet Payments Challenge the Retail Payment Industry? Financial Innovation in Retail and Corporate Banking, 214-232. doi:10.4337/9781848447189.00012
Cannon, R. N. (2001). Where Internet Service Providers and Telephone Companies Compete: A Guide to the Computer Inquiries, Enhanced Service Providers and Information Service Providers. SSRN Electronic Journal, 144-168. doi:10.2139/ssrn.274660
Finel-Honigman, I. (2004). Socio-History of French Banks and Banking: Role Model for Global Banking. The Changing Environment of International Financial Markets, 304-312. doi:10.1007/978-1-349-23161-4_20
Haring, M. D., & Mattsson, J. (2013). A Linguistic Approach to Studying Quality of Face-to-Face Communication. The Service Industries Journal, 19(2), 28-48. doi:10.1080/02642069900000017
Mahon, S. (2012). Impact of developments on market players. Power Market Transformation: Reducing Emissions and Empowering Consumers, 41-56. doi:10.1049/pbpo124e_ch3
Mowbray, M., Brasileiro, F., Andrade, N., Santana, J., & Cirne, W. (2015). A Reciprocation-Based Economy for Multiple Services in Peer-to-Peer Grids. Sixth IEEE International Conference on Peer-to-Peer Computing (P2P06), 365-388. doi:10.1109/p2p.2006.3
Nicoletti, B. (2014). Mobile Banking throughout the World. Mobile Banking, 126-141. doi:10.1057/9781137386564_8
Singh, S. (2010). Mobile Banking Adoption Model Results.BI Intelligence. Technology Adoption and the New Dimensions of Mobile Banking, 294-330. doi:10.4018/978-1-4666-9699-0.les12
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