The Challenges of Traditional Banking Industry
When everyone is busy discussing the latest financial success in the economy, how many have pondered over the thought relating to the traditional banking industry and the challenges it is facing or the source of it success. Today we have banks functioning well only in rural areas because technology is yet to reach such places.
With the outburst of online trading software like the bitcoin code, BTC profit etc, transactions have become quick and easy that nobody depends on the bank for this purpose. Some of the challenges that banks face today are:
- Not making enough profits: though we witness much news saying that banks have huge profits, the reality is that there is not enough profit. This is because there are many other opportunities for investment and savings for people like the mutual funds, online trading, and other financial institutions which cater to savings plans, thus there is not a good return on investments in the banking sector.
- Consumer expectations: although banks are working towards adopting technology developments along with the industry’s pace there is no customer satisfaction and this demotivates the performance of the banks to a large extent. Customers expect more deliverability and response from bankers.
- More competition from financial technological industries/companies: there is a huge growth of the fintech companies which are more customer oriented and follow recent technology aspects. This has become a real challenge to the banking industry because people are preferring to use such companies for their financial needs. Banks need to pay more attention to imbibe the technology that is expected by the customers.
- Regulatory pressure: with the continuous changes in methods and the technology, banks must keep abreast these and hence there are more compliance procedures for the banks to follow. This, in turn, creates a pressure and low self-esteem of the banks.
- Media growth: there is always more of advertising and media presence necessary for the growth of any business. The banks are very new to this and hardly advertise about their abilities, hence there is a possibility of not being in the limelight of customer preferences.
The banking sector must look at how they can revamp the industry back to success. There should be new regulations and training to improve the working culture of banks and sustain this traditional industry for the future too.