Traditional banks might vanish from financial landscape by 2025- 2030, a new report from PwC has revealed.
Titled "The Future Shape of Banking," the new research study said that as barriers to entry for non-banks to provide formerly ‘core’ banking services continue to decline, the business models of today’s banks will be challenged.
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PwC financial services partner Miles Kennedy said, "The status quo is no more but the need for banking services remains."
"Banks still have advantages and alternative providers suffer from a lack of trust but to be part of the future banks need to invest heavily, rediscover and reassert their core role in society, and secure the ongoing support of policymakers," Kennedy added.
The report highlights that banking services will retreat from physical, tangible distribution into technology-enabled channels and with the advancement of technology, it will become easier for customers to move between banks and other service providers.
Furthermore, brands would become central to banks’ value and those which build a brand which represents trust, integrity, security and quality to customers will be more likely to solve the ‘transaction cost’ of choosing how and with whom to bank, the study underlines.
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By GlobalDataBy that time, it is believed that the banks could become utilities focused on the management of deposits below insured limits and providing a narrow range of domestic credit products.
The report also points out that regulators and regulation also need to adapt their mindset and approach in order to deal with the changing banking landscape.
