If Coca-Cola Can Be Disrupted, So Can Your Bank
By Karen Shaw Petrou
Disruption is all the rage these days, with companies like Uber and Airbnb demonstrating just how fast new entrants can reshape entire sectors. But the winds of change are also leading industry behemoths to alter the way they do business. Just a year or two ago, who could have predicted that Coca-Cola would be compelled to develop a high-protein milk drink or that McDonald’s would contemplate table service and celebrity chefs? Banking is even more vulnerable to disruption than these once impregnable purveyors. The industry is being pummeled by the same forces of technological change and shifting consumer preferences, as well as by regulations that redefine banking in often-uneconomical ways and limit the sector’s ability to quickly adapt to shifting environments. That’s paved the way for the rise of shadow banking, a term that conjures up the image of sinister figures eager to prey on weak banks overwhelmed by regulation. Such terminology is now outdated. Although I used it just last year to warn the Federal Reserve about the rapidly realigning financial playing field, nonbanks have become a powerful force operating in the plain light of day. They now pose a clear danger to the business models of banks large and small. Objective analysis of the factors that give nonbanks an edge is thus a vital priority for traditional financial institutions’ strategic planning.
http://www.americanbanker.com/bankthink/first-disruptors-came-for-coca-cola-now-theyve-come-for-banks-1072776-1.html
