Today banks are no longer what the "baby boomers" used to know:
physical branches with heavy human interaction even for relatively simple operations. Today
bank branches are more and more technological, with consulting desks within design
environments and areas full of multi-function customer service points.
The real trend today is On Line Banking. In just a few years, customers got used to managing their bank account directly from home (according to Eurostat, in Europe, 51% of the population happily use Home Banking*) and increasingly through an App on their smartphone (according to VISA, 62% of Europeans check their bank statements or access other services via a banking App*) to the point that they rarely go more than once a year to the branch office.
There are more and more banks without branches, some spin-offs of traditional banks and others born as online only banks. The latest trend is banks born directly on smartphones for smartphone’s users.
In this race towards digitalization, numerous tools have been created that can be integrated into the on-line model, able to change the mode of interaction with the customer and to mix the competitive levers available to banks. The first step was the chat-bots, or chat sessions where the user can ask questions at anytime and receive immediate answers from a ro-bot. If the answer does not satisfy the user, control passes to a human operator. The natural evolution was the "robo-advisor", a virtual financial consultant, which based its advice on evaluations performed by an artificial intelligence system. The digital assistants are increasingly used in banking processes: the better known ones are Apple's Siri, Amazon's Alexa, Google Now and Microsoft's Cortana. We are talking about virtual assistants, who understand and speak with a human voice, an evolution of chat-bots. In the banking sector, for some time now, we have been working on combining the concept of digital assistant with that of robo-advisor, to ensure that the virtual assistant who interacts with the user is able to provide real financial advice, finalizing also possible banking operations.
So far we have talked about endogenous changes to the traditional banking world, which however begins to be threatened directly from the outside. Some of the so-called OTTs (Over The Top), that is the giants of the digital world (Google, Amazon, Facebook, PayPal, Apple, AliBaba, etc), have long started to take care of the digital payments of banks, and, in some cases, they are organizing in order to be able to offer all-round banking services. A recent development is the announcement by Amazon that is studying together with JP Morgan Chase & Co. and Capital One Financial, a product similar to a bank account, to be offered to its millions of customers through its own brand.
Another exogenous challenge for banks is represented by the push to the so-called "Open Banking" introduced by the last directive on payment systems (PSD2 - Payment Service Directive 2), issued at European level. This regulates the birth of the so-called TPP (Third Party Processor), subjects able to insert themselves in the relationship between customer and bank, accessing, at the request of the former, the data held by the bank itself, while offering financial aggregation services (for example a single dashboard in which to see the updated summary of all its financial assets held by more than one bank) or handling payments and transactions on behalf of the client. The latent risk is obviously connected to the possibility that these new subjects may be able to progressively replace the bank in the primary relationship with the client. A case of a player that is developing its business model in this direction is Oval Money, a start-up with excellent pedigree and high level investors.
This picture shows us that the traditional banking world is going through a great revolution today, which involves a disruption of the habitual models, especially in the relationship with the customer. In the next ten years, traditional banks will face a vital challenge and to overcome it will have to demonstrate adaptability, ability to innovate and lateral thinking. How does FCA Bank fit in this context of strong change?
FCA Bank is not a traditional bank. It is a new bank with a strong digital soul. As a banking extension of a top level global car maker, FCA Bank has chromosomes more similar to those of an “OTT” and this fact places it among the players who will have more opportunities to increase their market penetration by exploiting the industrial assets linked to the core business, rather than among the "incumbent" banking operators who, instead, need to understand how to best defend themselves from the threats of new entrants.
For some years now FCA Bank, historically linked to the car finance market in all various possible forms (retail financing, leasing and long term rental), has arrived in the banking world with an on-line oriented approach. In 2016 Conto Deposito in Italy was created, where at the end of 2017 the new deposits collection reached € 500 million. In light of the positive results achieved in less than 18 months by the Italian online product, FCA Bank has decided to continue in this direction and, expanding the geographical scope of its offering, the Bank chose to launch Conto Deposito in Germany, where there is a large market for bank deposits and where conditions are highly favorable. Once again FCA Bank has undertaken a strategy of international development that none of the main Italian banks had previously explored, showing that it is a true pioneer.
From this year it is also possible to request a Personal Loan, a flexible and convenient product to realize one’s own projects, and adaptable to different liquidity needs.
With this new project FCA Bank confirms the spirit and the motivation that characterizes it: digital approach, innovation, the key drivers of growth and diversification.
BEM Research processing on EUROSTAT data
Digital Payments Study 2017, VISA