Banks facing new breed of lenders: PwC
[SINGAPORE] Goliath, meet David. Banks that are already struggling to keep up with regulatory costs have to keep an eye on competition from a new breed of lenders that are fleet-footed and have technology on their side, said PricewaterhouseCoopers (PwC) in a report.
It has also left industry watchers wondering if traditional lenders can eventually pass on the cost from new investments to customers, as profitability erodes. "Banks today are facing rapid and irreversible changes across technology, customer behaviour and regulation. The net effect is that the industry's current shape and operating models are no longer sustainable into the future."
In particular, the paradigm shifts in technology have become "a major handicap for incumbents", PwC said. The physical and software systems that banks have developed - and at a high cost - used to be a solid defence against start-ups. But with customers demanding services such as mobile banking, such rigid infrastructures have turned into liabilities.
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