A festival of innovation and thought leadership

I’m looking forward to the Amplify event coming up in about a month. We are living in extraordinary times and banking is on the verge of changing forever. This change is being led by consumers exercising their creativity and embracing new technologies which are fueling dramatic societal changes driven over the last twenty years by widespread adoption of Information and Communication Technologies (ICT). Consumers expect to use new channels and have access to new solutions that leverage these powerful information and communication technologies

This consumer-led transformation joins three key trends that define the future evolution of the banking industry…

Demographic: Increasing US diversity, aging baby boomers, rise of “Digital Natives”
Technology Evolution: Multi-channel integration, emerging digital distribution/mobile, non-traditional banking competitors, cloud computing evolution Macro-economic Changes: Increased wealth concentration, regulatory pressure, economic uncertainty, the rise of the rest (previously economically disadvantaged), globalization
These trends bring challenges and significant opportunities. The companies that harness these shifts will capture portions of the two largest profit pools in the world: Banking with its financial services and Payments of all forms.

Traditional models of banking and payments have demonstrated that they are not as stable as once believed. The loss of confidence in traditional institutions revealed by the recent financial system collapse highlights complex, systemic problems within the financial system that has not adjusted to the needs of its customers and lacks the leadership needed to make the necessary improvements to secure their future.

The short term focus on operational controls, that is prevalent in banking, may undermine its very survival for the longer-term. Little evidence is apparent within the Banking Industry of the profound innovations that are needed or of longer-term investments in rebuilding the foundations of Banking. However, there is some evidence that appropriate innovations and investments are being made by non-traditional companies adjacent to banking- related activities. These non-traditional players are destined to threaten traditional banks as they collide in the pursuit of satisfying the expectations of customers.

Jeff Carter is the founder of the MIT Media Lab Center for Future Banking. He is speaking at Amplify 09 on “What will emerge from the GFC (Global Financial Crisis?”