Retail banking as we know it is evolving at a rapid pace. It’s no longer changing just in terms of bank mergers, more drive through windows, and fewer tellers in the lobby.
Today, the industry is facing far more revolutionary ideas, changing the way the world handles monetary transactions. These changes are driven in large part by the digital disruption we all face today, largely propelled by the rise of connected products, the Internet of Things, and evolving consumer expectations. The good news though, is that things are getting a lot safer and quicker when it comes to online banking. You no longer have to worry about your money being lost. Instead, banks have made it so that money transfers are a lot more simpler. Depending on where you live, there will be certain things that can be used to help your transaction. For example, if you live in India then you can use a bank code to help you secure your transaction. This bank code can be found at MyIFSCCode, if you are interested in getting one. This is the only way thing that has changed when it comes to online transactions though, so you have probably seen plenty of other things changing. Your bank will be trying to do all they can, to make sure that your transactions are quick and safe. That is the most important thing that they have to deal with.
Banks are also facing threats from nontraditional players who are providing many services traditionally found in the domain of retail banks. These new players are disrupting the industry, providing services in many of the ways that today’s consumers expect to interact with companies – quickly, across multiple platforms, and with very few barriers to entry.
Slowly, the banking industry is responding to these changes. The question is whether they can adapt quickly enough to make a difference, attract new customers, and regain customers that have long since abandoned them. Those that are investing wisely will find new revenues. Retail banks that do not examine new investment ideas may be left with nothing more than those big glass fish bowls filled with brightly colored lollipops.
A credit card alternative
Have you noticed that on many online checkout pages, there’s another option besides the major credit cards for payment?
PayPal is not a new player, but it has rather quietly shifted the way we pay for items and send money elsewhere. PayPal has become the premier digital payment transfer mechanism. Last year, the company completed 4.5 billion payment transactions. Of those payments, a quarter were done via a mobile device.
PayPal boasts 179 million accounts with active customers. In addition to completing online transactions, users can use PayPal to send payments to freelance writers, complete online auction payments, transfer money to bank accounts or send money to individuals. PayPal’s reach is global. Today, PayPal users can get paid in 100 different currencies, hold money in PayPal accounts in 26 currencies, and withdraw money in 57 currencies. There are a number of other money transfer services like OFX or TransferWise that perform in a similar manner.
What’s more, PayPal is secure and trusted as a monetary exchange model. While it does not have physical storefronts, in many ways its virtual existence is part of its appeal. PayPal is intuitive to use and provides its account holders with most of the same features of traditional retail banks. Customers can check balances, receive notifications of deposits and withdrawals, and access months worth of transactions. For many, PayPal has replaced the traditional checking account.
Its popularity is growing too. Customers used PayPal to complete $282 billion in payments through 4.9 billion transactions. During the busy holiday season, PayPal saw a 25 percent year-over-year growth in transaction volume.
PayPal is just one example of a disruptive new player. To keep up, retail banks are going to need to adjust services in ways that provide speed, convenience, and ease of use on desktop and mobile devices. For the average consumer, PayPal does what the banks do, but in some ways, it does it even easier.
Except for the lollipops.