In recent years, big tech companies have been pivoting into different industries.
And with the emergence of open banking, theyve now turned their sights on the finance industry.
Google Pay will soon let Citibank customers (and nine other banks)manage accounts directly from the app.
Apple launched theApple Card, its own credit card issued by Goldman Sachs.
Amazon now offers up to$1M in loansto small businesses.
Meanwhile, Facebook plans to launchits own digital currency Diem(formerly Libra) in the US.
Who do consumers trust most?
Consumers are more risk averse, with a heightened sense of which organizations they can trust and rely on.
Another issue is security.
Big techs track record with data breaches, both external and internal, have been called into question.
All this means that banks could compete with big tech if they maximize on that trust gap.
But tech innovation remains a significant hurdle.
He continued,regardless of whats happening around us, people still trust banks today.
Its a safe haven.
But this heritageis also their disadvantage in the race against big tech players.
Snijder admits that banks have beenreluctant to adopt certain external solutions:
Its the not-invented-here syndrome.
Banks traditionally only trust the solutions that they build, manage and control themselves.
This has two disadvantages.
Firstly, theyre very expensive, and secondly, theyre not always customer friendly.
The biggest challenges facing banks today are slow growth, profitability, and digital adoption along with strict regulations.
Outdated systems and processes may mean these institutions could fall behind financial big tech.
The question is how can we manage that?
And the biggest beneficiaries should always be the customer, says Snijder.
Through itsDigital Impact Fund, ABN AMRO partners with up and coming fintechs.
For example, their partnership with Swedish startup Tink resulted in a personal finance management app called Grip.
Meanwhile, their partnership with BehavioSec gives them access to the latest cyber-security technologies.
Its about using it to address wider trends and demands in society in line with consumer expectations.
This is what will differentiate and ensure the continued success of traditional banks.
There is a complete transformation from being a money-driven to a society-driven organization.
Its a paradigm shift.
Listening and adhering to the customers needs nurtures the existing trust they have.
