A new report unveiled at the International Summit of Cooperatives in Quebec identifies five forces that can transform the financial services sector, posing new challenges to financial co-operatives. The report, titled Global banking outlook 2014-2015, is an initiative of Ernst & Young Global Limited (EY), one of the world’s four largest international auditing firms.
In his presentation at the Summit, Paul Battista, Canadian financial services advisory leader at EY, highlighted that “co-ops were founded on a member-centric culture.” He added that in order to survive and thrive in the face of the challenges faced they needed to respond with strategies that address key dimensions of their business.
EY’s report identifies five forces which, according to Mr Battista, are threatening co-ops’ competitive advantage. These are: local and global regulation; customer expectations and demands; new technology; and innovation, competition and the society.
“Getting member interactions right is critical. Retail customers across the board are demanding greater transparency, personalised products and seamless transition between channels,” added Mr Battista. He also explained how, by using a digital media strategy, co-ops can enable members to personalise when, how and where they bank.
“Digital is quickly becoming the primary service channel and a key component of an omni-channel strategy for financial institutions. At the same time, branches are focusing more on complex advice and sales,” he said.
When it comes to increased competition, targeting defined member segments can enhance a co-operative’s competitive position and offer comparatively better revenue growth opportunities, said Mr Battista.
“We’re already seeing dramatic changes in the financial services landscape. To stay competitive, co-ops must recommit to their member-centric culture, and invest in an integrated, dynamic plan for both digital and physical channels, informed by comprehensive analytics of member preferences.”
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