Consider that you are in a jungle north of South Africa’s Cape of Good Hope watching an ostrich being stalked by a few tigers. The ostrich, realizing this menacing presence, does not worry as it knows what to do: stick its head in the sand and the tigers will go away.

That is retail banking today, where the ostrich is a retail bank and the tigers are the mobile- only AI powered challenger banks (not to mention Amazon).

According to Business Insider, 40% of millennials do not visit physical banks at all. Most actually consider a visit to a branch as ridiculous. The retail banking business model is clearly out of sync with today’s economy, technology and consumer demographics.

Already traumatized by accumulated Non-Performing Loans (NPL’s), at hand is not just an issue of digitization and simply providing a web banking service over mobile wrapped as an Android or iOS app. Although consumer facing digital banking is not something new and includes ATM’s and legacy web banking services, the time for an AI powered next step in banking has arrived, and it is indeed a large step.

What to do?

Essentially, we are now in a different reality where digitization, in conjunction with Artificial Intelligence, needs to be urgently addressed as a transformative implementation vehicle for a new paradigm. This reality is reflected by this this LinkedIn Post on the top 10 UK Startups where 60% of the companies mentioned are in the Fintech Challenger space.

So, what to do? Top Banking leaders and/or board members cannot be expected to know AI and where, how and when to leverage it. However, ultimately they decide and the risk of not doing anything is substantially more than the risk of doing something.

#fintech #banking #artificial-intelligence