With the crisis of confidence in established banking brands, are
there opportunities in financial services for trusted brands from other
sectors? It seems that Tesco thinks so. It has bought out its banking
partner Royal Bank of Scotland, paying the £1 billion for its 50% stake
in Tesco Personal Finance. Tesco claims that it has seen the number of
applications for savings accounts double in recent weeks and has
announced that it plans to expand its banking business, offering
current accounts within the next year and mortgages "in due course".
Others are expected to follow suit.
There also seems to be an opportunity for new entrants. Cisco
in the US recently published results of a survey into customers’
attitudes towards payment trends, both online and offline. It found
that people increasingly trust online payment processing solutions such
as PayPal and Obopay. And baby boomers, the biggest and richest
consumer generation, trusts these alternative payment providers more
than traditional banks.
Conversely, traditional banks could up their game and improve their services to these connected consumers.
The
Pelorus Group estimates that by 2010, payments made via emerging
methods such as radio frequency identification (RFID), SMS, and
biometrics are expected to grow to $400 billion. In addition, consumers
are increasingly interested in using a mobile device to make
contactless payments in physical stores.
According to Jim
Greene, vice president and global head of financial services, Cisco
IBSG, "consumers not only recognise the conveniences enabled by the
internet but now also require the totality of their shopping
experiences to afford those same benefits. Given their current
interaction with both consumers and merchants, banks are in a unique
position to provide these 'connected' propositions and the insight that
leads us into 21st-century commerce."
