The Next Wave Of Banking Competition

by Snarketing 2.0

By Ron Shevlin

Damn that Brett King. Had to title his book Bank 3.0, didn’t he? The book (which as I said in my Amazon review is a must-read by anyone working in financial services), talks about the progression of banking from branches (1.0) to the Web (2.0) to mobile (3.0).

I have no argument with this interpretation. But I think of the evolution in terms of how the predominant basis of competition has changed, not in terms of the change in channel focus.

Phase I: This phase of  competition (post-WWII) focused on who had the most/best locations, and who provided the best (friendliest, most helpful) branch-based service.

Phase II: As the nation’s overall level of education and affluence rose, we developed more sophisticated borrowing needs (mortgage, education, other personal loans) and more opportunities to save. As a more educated society, we believed we should be more “economic” in our decision making, and not just put (or take) our money from whomever had the closest branch. As a result, Rates became the new focus of competition — who had the best rates (lowest for borrowing, highest for saving) or lowest fees became the primary basis of competition.

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