Technology research firm Gartner recently released its annual report presenting research and predictions on trends in several industries, including financial services. The report, titled "Top Industry Predicts 2012: Industries Face intensified Consumerization and Technology Disruption," includes recommendations for CIOs, senior business executives and IT leaders to consider while planning enterprise initiatives.
As the title of the report indicates, Gartner predicts that businesses across industries will need to adapt to changes in customer expectations brought about by technology innovations. "Many industry business models will be challenged through 2015 as customers continue to adopt an always-connected digital lifestyle and market competitors exploit emerging technologies to achieve business growth and success," writes Kimberly Harris-Ferrante, vice president and distinguished analyst at Gartner, in the introduction to the report.
Gartner includes financial institutions in the businesses it says will be challenged by emerging technologies. Specifically, Gartner analysts Stessa Cohen and Peter Redshaw predict, "By 2015, new, external social web and cloud-based services will generate 25 percent of consumer-driven banking products and services." (The report mentions social payments startup Twitpay and the virtual currency Facebook Credits as examples of these types of services.)
This predicted shift in usage is related to the fact that consumers are increasingly spending their time on social networks -- more than the time they spend on bank websites, according to Gartner. Because of this, consumers expect retail banks to provide the same types of services and transactions, as well as the personalization, that social networks are providing. "People are used to having this freedom and variety of choices in other areas of their life, so banks need to be up to speed," says Cohen.
Cohen asserts that because some social web and cloud-based services have the potential to partner with traditional banks and also to disintermediate them, they present both a benefit and a threat to financial institutions. She recommends that banks start changing how they view the social web in order to stay relevant and combat disintermediation. "Some think it's just for marketing people but it's also part of IT, and it needs to be incorporated," she says of the social web component. "It's not just a push channel. It's a form of customer service and will also change the way banks do business."
[Like external social web products, PFM tools present both threats and benefits to banks. Read more at Banks Fight Disintermediation With Personal Financial Management Tools.]
The Gartner report points to Commonwealth Bank of Australia, Citi and Bank of Melbourne as examples of banks that have rolled out products and services that integrate social networking platforms. Cohen says that we should see more of that in the coming years. "The social component is increasingly becoming part of the way banks have to enable interactions," she notes.
The report suggests that to stay relevant, banks should review strategies for social web interactions and identify possible partnerships for participation in commerce that's initiated via social networks or cloud-based portals. It also recommends bank executives define the criteria that differentiate their institutions from nontraditional competitors responding to the same business requests.
"Top Industry Predicts 2012: Industries Face intensified Consumerization and Technology Disruption," is available in its entirety on the Gartner Predicts 2012 website.